Morvillo Abramowitz Wins $15 Million Arbitration Award and Full Vindication for Client Kenneth Lipper
October 28, 2010
After almost nine years of hard fought litigation, on October 28, 2010, the firm obtained a tremendous result fully vindicating its client Kenneth Lipper. When a hedge fund managed by Mr. Lipper was dissolved in 2002 after it was revealed that the fund’s portfolio manager engaged in a mismarking fraud, Mr. Lipper was named in nearly 20 lawsuits and was accused of committing fraud, acting negligently, and breaching fiduciary duties. After a 19 day arbitration hearing that concluded in January 2010, a FINRA arbitration panel totally rejected claims brought against Mr. Lipper by the fund’s liquidating trustee and concluded that Mr. Lipper acted appropriately in managing the fund. In addition, the same FINRA arbitration panel awarded firm clients Mr. Lipper, Lipper & Company, L.P., and Lipper & Company, Inc. more than $15 million in damages, finding that the Trustee was contractually obligated to indemnify them for entirety of the legal fees and expenses they incurred in connection with their successful defense of the 20 actions and investigations arising after the fund’s dissolution in 2002. On October 28, 2010, the Honorable Shirley Werner Kornreich of the Commercial Division of the New York Supreme Court, New York County issued a 21 page decision confirming the FINRA arbitration award. The Panel’s decision and Justice Kornreich’s Order represents yet another affirmation of the firm’s long held position that Mr. Lipper acted properly and appropriately in managing Convertibles, that he was a victim of the portfolio manager’s underlying fraud, and that all of the lawsuits brought against him lacked any merit whatsoever. The Morvillo Abramowitz attorneys representing the Lipper Parties at the FINRA arbitration and the New York state court proceedings included Elkan Abramowitz, Catherine M. Foti, Jeremy H. Temkin, Benjamin S. Fischer, David C. Austin, David J. Stankiewicz, and Scott Schirick.