In a typical Ponzi scheme, early investors usually receive high returns. As the ruse collapses, the enterprise typically goes bankrupt, and investors lose everything. If the bilked investors decide to sue, the bankruptcy trustees in Ponzi scheme litigation frequently has the authorization to redistribute any money generated and recovered from the scam.
The Ponzi scheme attorneys at Silver Law Group devote their careers to representing investors who have been swindled. We can advocate for your position before the bankruptcy trustees and help you recover as much of your lost funds as possible – all on a contingency fee basis.
A Ponzi scheme’s collapse typically forces the scammers into bankruptcy. To recover their lost funds, the cheated investors and other creditors must sue in bankruptcy court.
In a Ponzi scheme case, the bankruptcy trustee usually secures and liquidate the scammer’s assets and may reclaim any profits that other investors derived from the ruse. The trustee must then distribute the funds fairly among the defrauded investors.
Investors often seek redress through a class action lawsuit, which allows defrauded investors to work together to hold the con artists and others who abetted the scam accountable. Our attorneys can file class action lawsuits naming the Ponzi schemers, as well as the banks, accounting firms, law firms, investment advisors, and others who aided or promoted the scam.
The success of a Ponzi scheme is frequently based on the good experience of early investors, which encourages others to invest their money. New investors provide the funds to pay returns to earlier investors.
The Ponzi presumption is a legal theory that shifts the burden of proof, forcing the con artist to prove that payments from the scam had a legitimate purpose. If they can’t do so, the presumption allows the bankruptcy trustee to assume that all money paid from the Ponzi scheme was in support of the fraud. The bankruptcy trustee can proceed as if all returns paid to early investors were fraudulent.
The 11United States Code § 548 gives the bankruptcy trustee authority to claw back any funds paid out in support of the fraud. The trustee can bring a legal action to recover the net profits that earlier investors may have received, and in some cases, the trustee can also recover the principal funds. Our securities fraud attorneys can explain the bankruptcy trustee’s authority in a case to recover funds from a Ponzi scheme.
If defrauded investors seek compensation through a class action lawsuit, each participant must provide documentation of their activity in the scheme and prove their net loss. Silver Law Group can ensure that the documentation submitted to the bankruptcy trustee for the Ponzi scheme case is accurate and complete. The investors must then wait for the bankruptcy trustee to gather the available assets for distribution.
Recovering assets in a Ponzi scheme is complicated, and the trustee often must file multiple legal actions to obtain control over the scammer’s assets and funds that were paid out. The process may take several years to complete.
The goal of the bankruptcy proceedings is to distribute recovered assets fairly among those who lost money. After validating the investors’ information, the trustee distributes the available funds proportionally to each investor’s losses.
Losing money in a Ponzi scheme is devastating and investors rarely recover their entire investment. Instead, the goal is to minimize losses to the best degree possible.
Bankruptcy trustees in Ponzi scheme litigation have significant authority to determine the recovery of cheated investors. If you lost money in one of these scams, contact our securities fraud attorneys for help. Silver Law Group advocates aggressively on behalf of defrauded investors and we have the history of excellent results to prove it.
