A Ponzi scheme is a fraudulent investment operation where the operator pays returns using its investors’ original contributions or funds from new investors, rather than profit earned through legitimate business activities. These schemes are dangerous because they inevitably collapse when the operator can’t recruit enough new investors to pay the promised returns, resulting in significant financial losses for the majority of investors.
Liability in New York Ponzi schemes can fall on the individuals directly involved in perpetrating the fraud, as well as potentially on third parties such as financial institutions or brokerage firms. The experienced Ponzi scheme attorneys at Silver Law Group represent people in similar situations in various legal actions to recover losses in class action litigation.
In Ponzi schemes, multiple parties can be held liable in New York City for aiding and abetting the fraud, not just the originator. Ponzi schemes usually require the involvement of third parties to attract investors and maintain the appearance of legitimacy, whether they actively knew it or not. Beyond the scheme’s creator, individuals or entities that facilitated the scheme, aided in its operation, or turned a blind eye to suspicious activities can also face legal repercussions. This includes financial advisors, accountants, lawyers, commercial banks, and investment banks.
Even feeder funds, which are investment funds that funnel money into the scheme without proper due diligence, can be held liable. The fraudster often loses or dissipates the money obtained through the fraudulent scheme, leaving victims with limited avenues for recovery.
In cases where the fraudster’s assets are depleted or insufficient, pursuing claims against liable third parties can broaden the scope of potential recovery for victims. This is crucial for maximizing the compensation available to those who have suffered financial losses.
Silver Law Group focuses on helping Ponzi scheme victims in New York City recover their losses from a range of liable parties. These avenues include civil litigation, such as class action lawsuits.
By combining numerous similar claims into a single lawsuit, class actions make the legal process more efficient, saving time and resources for both the plaintiffs and the court system. This is particularly helpful when individual claims might be too small to justify separate lawsuits. Class action lawsuits can result in settlements where recovered funds are distributed to defrauded investors based on their losses.
The attorneys at Silver Law Group often act as counsel to receivers appointed by the Securities and Exchange Commission (SEC), particularly in cases involving Ponzi schemes or other investment fraud. The goal of an SEC receivership in a Ponzi scheme case is to protect assets, investigate the scheme, and distribute recovered funds to those who were harmed.
Determining liability in New York Ponzi schemes can be a complex undertaking. These schemes often involve various layers of transactions and accounts, making it difficult to trace the flow of funds and identify all participants, including those who may have aided or abetted the scheme. While the underlying principle of a Ponzi scheme is usually the same, the specific details and methods of operating the scheme can vary greatly.
The legal team at Silver Law Group can pursue class action claims against the Ponzi fraudster and any third parties who materially participated or are otherwise liable. We aggressively negotiate with opposing parties and are prepared to go to trial to protect your rights and recover the maximum amount possible. Silver Law Group primarily works on a contingency fee basis, so we only get paid if we successfully recover your money. Contact our firm today to request your free case review.
