When you lost a significant amount of money due to a Ponzi schemer, you may have legal claims that can help you get your money back. In addition to claims against the fraudster, you could bring legal action against others who participated in or assisted the scheme. Potential third-party defendants include lawyers, accountants, financial advisors, and frequently commercial banks.
Silver Law Group represents investors nationwide who have been the victim of various types of securities fraud. Our trusted Ponzi scheme attorneys routinely bring claims against commercial or investment banks for aiding Ponzi schemes. Our firm provides fierce advocacy for victims of fraudsters nationwide and we can help you hold all the parties who participated in the scheme accountable.
A Ponzi scheme is a specific type of fraud. The operator establishes a business or investment fund, usually promises a high return, and solicits investors. The initial investors might receive reasonable returns on their money, helping to establish the legitimacy of the investment, but the returns are dependent on new investors constantly putting more money into the pool.
Eventually, there is a lack of new money coming in to pay the established investors, and the scheme typically fails. The creator of the scheme is often insolvent and cannot satisfy the claims of the investors.
The courts frequently appoint a receiver to collect the assets of the scheme promoters and make restitution to the investors. However, investors could seek compensation from others who had a role in aiding the commission of the fraud. The attorneys at Silver Law Group are adept at investigating all types of financial fraud to find evidence that could support a compensation claim. These potentially liable third parties include commercial banks.
There are several ways that banks typically get involved in Ponzi schemes. They might provide financial services to the fraudsters, allowing them to perpetrate the fraud. They sometimes take a more active role and invest the customers’ or clients’ money in one of these schemes. In other cases, banks face claims for knowingly participating in or covering up a fraud.
When a bank provides financial services to a Ponzi scheme operator, there are generally numerous transfers of funds between them as the operator makes deposits and withdrawals. The victims of a Ponzi scheme are creditors of the scheme operator, and they could make a legal argument that any transfer by the bank was a fraudulent transfer.
When there is evidence that a commercial or investment bank knew or should have known that a customer was engaging in fraud, continuing to provide banking services to them could be construed as assisting in the fraud. For example, when a bank does a due diligence investigation and finds the business’ returns are implausible, a court might hold that the bank had sufficient knowledge of fraud and should have suspended its relationship with the business.
When there is no strong evidence demonstrating a bank knowingly participated in or aided a Ponzi scheme, it still could be possible for investors to hold the bank liable for their losses. The investors could claim the bank was negligent in not detecting the fraud.
Banks have an obligation to exercise due diligence. When they fail to do so and someone else suffers harm because of their failure, the harmed party might have a claim against the bank for negligence.
Banks often have a role in assisting Ponzi scheme operators, whether knowingly or unknowingly. Investors who lose money in this scheme might have claims against commercial or investment banks for aiding a Ponzi scheme.
The attorneys at Silver Law Group devote our careers to helping investors, and we have the track record to prove it. Reach out today to discuss your situation and learn how you might recoup your investments.
