Morvillo Abramowitz Successfully Defends Private Wealth Management Company in Madoff-Related Litigation
March 2, 2011
On March 2, 2011, Morvillo Abramowitz, led by Partners Robert J. Anello and Judith L. Mogul, won the dismissal of all claims against a well-regarded private wealth management company brought by three former investors in Westchester County Supreme Court. The private wealth management company had provided the investors with decades of outstanding, long-term investment management services, earning the primary investor millions in profit. In the wake of the general financial downturn in 2008 and Bernard Madoff’s now-infamous fraud, the investors sought to hold the wealth management company liable for the reduction in their portfolios’ profits, including for losses that the primary investor sustained in two indirect investments in Madoff feeder funds.
The principal investor had previously brought and lost an arbitration before the Financial Industry Regulatory Authority (“FINRA”) against a number of entities and individuals related to the wealth management company. In the subsequent New York State-court action, the judge accepted the argument advanced by Morvillo Abramowitz that the FINRA arbitration precluded relitigation of the primary investor’s claims. The court held that the plaintiff “cannot pursue the same claims in another forum against the same parties or their privi[ti]es.” It dismissed all claims against the private wealth management company by the investor with prejudice. The court also dismissed with prejudice the fraud claims brought by the remaining two plaintiffs who were not parties to the arbitration, and also dismissed without prejudice negligence and breach of fiduciary duty claims by the same plaintiffs.