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Two Federal Suits Highlight Retail Banks’ Potential Liability in Ponzi Schemes

February 9, 2009

A pair of federal lawsuits against Sovereign Bank and its Spanish parent company Banco Santander S.A. highlight the legal battles surrounding retail banks’ liability in Ponzi schemes, including the Bernard Madoff scam.

A new case in the Southern District of Florida against Banco Santander tries to pin liability on the company for its investment management company Optimal Investment Services S.A., which had a sub fund heavily invested in Madoff’s company. In Massachusetts, a lawyer and receiver for defrauded investor-clients is seeking a retrial of a case against Sovereign Bank and officials for allowing convicted Ponzi scheme operator and former Boston radio station owner Bradford Bleidt to keep funds from investor-clients in a standard bank account. Inversiones Mar Octava Limitada v. Banco Santander, No. 1:09-cv-20215, (S.D.Fla.); Fine v. Sovereign Bank, No. 1:06-cv-11450 (D. Mass.)

Madoff faces a federal trial for allegedly running a Ponzi scheme that defrauded investors of $50 billion, while cases against so-called feeder funds, fund executives and auditors pile up in state and federal courts.

 

Read Article: Law.com

 

Mass. state trooper sues Taser maker

A Massachusetts state police trooper says in a lawsuit against the maker of the Taser that exposure to the electroshock weapon during a seminar bent a surgical screw in his leg.

 

James Foley of Grafton is seeking $1 million in damages in the suit filed last week in U.S. District Court in Worcester. He claims the incident caused pain and suffering, led to a reduction in pay, and negatively affected his relationship with his wife.

 

Foley’s lawyer, Jeff Scuteri, tells The Worcester Telegram & Gazette the $1 million is a placeholder number.

 

Read Article: Arizona Republic

 

Justices to weigh cleanup liability

For years, businesses large and small viewed as unfair but unchangeable their potential liability for the entire cost of a Superfund site cleanup, no matter how tenuous their connection to the site.

But an oil company and two railroads, on the hook for a $40 million cleanup, will urge the U.S. Supreme Court this month to limit how most courts and the federal government approach liability for cleaning the nation’s worst hazardous waste sites.

Although the federal Superfund law has been on the books for nearly three decades, there were 1,258 uncontrolled hazardous waste sites on the so-called National Priorities List as of last September, according to the Environmental Protection Agency, and more sites await listing.

 

Read Article: Law.com

 

Conroe couple sues St. Lukes for failing to X-ray child

A Conroe couple sued St. Luke’s Hospital hospital this week for failing to X-ray their 3-year-old girl’s nose and spraying medicines that corroded the battery the child had imbedded in her nostril.

 

Keri and James “Zach” Jordan sued a doctor and the St. Luke’s Woodlands hospital on Thursday for medical malpractice, alleging they were wantonly negligent in caring for the child brought in to the emergency room in February 2007.

 

“It’s a tragic case,” said Houston attorney Michael Saunders, who filed the lawsuit. “When the battery acid got out, it destroyed a good deal of vital tissue and the nostril.”

He said the child was not only deformed but suffered increased asthma attacks and headaches.

 

Read Article: Houston Chronicle

 

Family of slain contractor sues Halliburton, KBR

A lawsuit against two military contractors claims the companies’ mistakes led U.S. soldiers to believe an American truck driver working for the contractors might be an insurgent steering a bomb-laden truck onto a U.S. military base.

 

In a lawsuit filed in Houston this week, Kristen Martin accused Halliburton Co. and KBR Inc. of the wrongful death of her father, truck driver Donald Tolfree, who was killed at a Camp Anaconda checkpoint, about 50 miles north of Baghdad, in February 2007.

 

The lawsuit does not blame the military, instead casting responsibility on the companies’ practices. Tolfree, of St. Charles, Mich., was told he would be protected by U.S. soldiers at all times. Instead, because of negligence and fraud by Halliburton and KBR, Tolfree was killed by U.S. troops, said Guy Watts, Martin’s attorney.

 

Read Article: Houston Chronicle

 

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