Co-author: David A. Gradwohl and Karin Corbett
Seton Hall Legislative Journal, Volume 34, Number 2
May 2010
Equity receiverships are designed to obtain assets that have been left in the possession, custody or control of the perpetrator of a fraud. Victims of a Ponzi scheme, however, must initiate other proceedings in order to maximize their recovery, as equity receiverships will not provide them with a full recovery of their investment.
David Gradwohl and Karin Corbett provide a comprehensive look at equity receiverships in this extensive article published in the Seton Hall Legislative Journal. They cover the full scope of receiverships, from their initiation through to their return on distributions as well as their limitations -- including other remedies through which victims of Ponzi schemes can attempt to regain their losses.
Topics addressed in the article include:
- Who was Charles Ponzi and What Was His Scheme?
- Anatomy of an Equity Receivership
- The Elements of the Equity Receivership
- Asset Freeze
- No Intervention by Victims of the Ponzi Scheme in Actions of the Equity Receiver
- Blanket Stay of All Litigation Against the Ponzi Scheme Wrongdoers by the Victims of Fraud
- Limitations on the Powers of the Equity Receiver
- Return of Principal and Pro Rata Distribution
- Available Remedies to the Victims of the Ponzi Scheme Outside the Equity Receivership Proceedings (Including Problems with Bankruptcy and Claims Against Lawyers, Accountants, Banks, Stockholders and Security Advisors)
In addition, Gradwohl and Corbett provide appendixes analyzing the Lehman Brothers involvement in John Gardner Black (the Ponzi scheme conspiracy) and the Devon/FMS/Lehman Timeline.
