The widow of deceased philanthropist Jeffry Picower has announced an agreement with the Madoff Trustee to return 7.2 billion dollars to the bankruptcy estate, which, according to the press release, represents "every penny received from almost 35 years of investing with Bernard Madoff."
In a press release through her attorneys, Ms. Picower expressed confidence that her husband, who was an extremely successful investor, was not involved in the fraud. She said that his investment prowress allows her to make the payment, which exceeds the estate's legal liability (presumably on a claw back claim), and "return to the philanthropic work that was so important to Jeffry and me."
With estimated cash losses of approximately 20 billion dollars, this 7 billion, together with the 2.3 billion the Trustee has recovered should translate into repayment of half of the investors out of pocket losses. Of course, that does nothing to address the billions in profits reflected on those investors fraudulent brokerage statements.
Friday, December 17, 2010
Tuesday, December 14, 2010
FoxNews.com - FBI Investigating Gawker.com Hack
Investigators from the FBI were expected to meet with Gawker Media CEO Nick Denton Monday following the massive weekend hack by a group called Gnosis that paralyzed the media company’s website and temporarily forced it to stop publishing.
Friday, December 3, 2010
Friday Q&A - Are EFLs and Promissory Notes Enforceable?
Friday Q & A – I recently left Bank of America after the ML merger, and they now want me to repay the bonus that I received. BofA killed my business, and ML actually made it worse? Do I have to repay the money? Will they settle or do I have to go to arbitration?
This is almost becoming a daily question in our office, and not only with Bank of America reps. The turmoil in the financial markets has cause turmoil for brokers and firms as well. Add to that the move to become independent, and/or starting your own RIA (finally!) and there is quite a bit going on in broker transition these days.
The short answer is that assuming you have the “standard” promissory note that the firms use you are probably going to have to repay the money. The promissory notes are unconditional promises to repay. In most cases, they are clear that if you do not work at the firm, or any reason, the note is due and payable.
However, that is not the end of the story. Many reps that leave firm have claims against the firm – after all, that is why they left. Those claims may constitute a counterclaim against the firm – for mismanagement, unilaterally changing the terms of your employment (like reducing payouts by 50%), a harassing manager, or even closing your branch. While the counterclaim does not void the note, and award in your favor on the counterclaim may offset, or eliminate, the amount owed on the note, and in some cases, an award on the counterclaim will exceed the amount of the note, resulting in a net payment to the broker, rather than the other way around.
Those cases are not the norm, but they do exist. And like most things legal, the counterclaim depends on the specific facts. I have represented brokers with great counterclaims, and those cases get resolved – that is why you do not see them in the arbitration award database. When the counterclaim is not as viable as it might be, we negotiate the note, enter into a new long term payment agreement, or otherwise settle the case. That sometimes takes some work, but at the end of the day the settlement is typically a better outcome than going to an arbitration and losing for the full amount.
The only way to have an idea of the viability of the claim is to have an experienced securities employment attorney review the facts – and of course your contract and note. Not all employee forgivable loan documents are the same.
And call me for a consultation before you leave your firm, not after. After all of these years it still amazes me how often brokers leave a firm, negotiate a new deal at a new firm, and wait until they are at the new firm to ask for a consultation. Do yourself a favor; call an attorney before you give notice, not after.
Questions? Email me at astarita@beamlaw.com or call my office at 212-509-6544. We represent brokers nationwide and have been doing so for 25 years. My CV is online at SECLaw.com
This is almost becoming a daily question in our office, and not only with Bank of America reps. The turmoil in the financial markets has cause turmoil for brokers and firms as well. Add to that the move to become independent, and/or starting your own RIA (finally!) and there is quite a bit going on in broker transition these days.
The short answer is that assuming you have the “standard” promissory note that the firms use you are probably going to have to repay the money. The promissory notes are unconditional promises to repay. In most cases, they are clear that if you do not work at the firm, or any reason, the note is due and payable.
However, that is not the end of the story. Many reps that leave firm have claims against the firm – after all, that is why they left. Those claims may constitute a counterclaim against the firm – for mismanagement, unilaterally changing the terms of your employment (like reducing payouts by 50%), a harassing manager, or even closing your branch. While the counterclaim does not void the note, and award in your favor on the counterclaim may offset, or eliminate, the amount owed on the note, and in some cases, an award on the counterclaim will exceed the amount of the note, resulting in a net payment to the broker, rather than the other way around.
Those cases are not the norm, but they do exist. And like most things legal, the counterclaim depends on the specific facts. I have represented brokers with great counterclaims, and those cases get resolved – that is why you do not see them in the arbitration award database. When the counterclaim is not as viable as it might be, we negotiate the note, enter into a new long term payment agreement, or otherwise settle the case. That sometimes takes some work, but at the end of the day the settlement is typically a better outcome than going to an arbitration and losing for the full amount.
The only way to have an idea of the viability of the claim is to have an experienced securities employment attorney review the facts – and of course your contract and note. Not all employee forgivable loan documents are the same.
And call me for a consultation before you leave your firm, not after. After all of these years it still amazes me how often brokers leave a firm, negotiate a new deal at a new firm, and wait until they are at the new firm to ask for a consultation. Do yourself a favor; call an attorney before you give notice, not after.
Questions? Email me at astarita@beamlaw.com or call my office at 212-509-6544. We represent brokers nationwide and have been doing so for 25 years. My CV is online at SECLaw.com
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