Next Securities Fraud / Subsequent Bankruptcy Case

Obtained $1,1 million Judgment in a Securities Fraud / Bankruptcy Case

• Summary of Facts

  • Defendant befriended the sole owner of client LCC and earned his trust. Defendant would take client on elaborate vacations to give the illusion that he was successful. Defendant told client he could make money through the stock market through penny stocks.  Through trust Defendant was allowed to act as the client’s personal stock broker through an ETRADE account.  Defendant lied about investments making good return and was manipulating the penny stocks for his benefit.  The defendant never informed client about his manipulation of the stocks nor his relationship with many of the owners/officers of the penny stock companies for which he would get compensation in exchange for getting money from people like our client.  Defendant’s conduct resulted in $1,100,000 in losses to client.

• Procedural History

  • We filed suit in the Orange County Superior Court for claims that Defendant committed fraud and violating several provisions of the California securities laws. Defendant field for bankruptcy which stayed the civil action. In the United States Bankruptcy Court in San Diego, we filed causes of action for non-dischargeability of debt under the bankruptcy code.

• Result:

  • Prior to the trial in the bankruptcy court, Defendant stipulated to a non-dischargeable judgment in the amount of $1,175,000. The bankruptcy court approved this settlement and made it a judgment.