Transactions
Robert B. Cohen Successfully Recovers Losses in an Investment Ponzi Scheme
In November of 2007, Robert Cohen received a phone call from one of his clients concerned about the state of his investments. In particular, Cohen was advised that the client's investment advisor had committed suicide and that the investment broker for whom the client believed the investment advisor worked had no record of the client or the client's investments. In investigating the matter further, it became apparent that the investment advisor, who was indeed an agent for the brokerage but who had limited authority to invest his client's funds, had set up a privately-held corporation with banking arrangements separate from the investment broker and had engaged in a Ponzi scheme to try and cover up unauthorized investment losses suffered by his clients. Within months, Cohen had been retained by 27 victims of the Ponzi scheme.
Over the course of the ensuing two years, Cohen was able to provide evidence to the investment broker and its insurers to substantiate liability and the quantum of damages suffered by the clients. This had become quite problematic because the investment statements provided by the investment advisor to his clients before his death were fabricated and, with the passage of time, many clients did not have complete records. Furthermore and before his death, the investment advisor burned accurate accounting records that he had kept for his clients over the years.
In the end and without having to commence an action on behalf of any of his clients, Cohen was able to retrieve more than $5,000,000 from the brokerage and $700,000 in insurance, which resulted in the clients receiving full recovery of their principal loss, with some interest, legal costs, and in some cases, significant compensation for loss of investment opportunities. The details of the parties involved have not been disclosed due to confidentiality concerns.