Federal Jury Says TD Bank Must Pay $67M to Investors Swindled by Ex-Attorney Scott Rothstein
After four hours of deliberation, a federal jury in Miami yesterday decided that a South Florida bank must pay $67 million to a group of 27 investors swindled by then-attorney Scott Rothstein.
The award, which includes $35 million in punitive damages, is based on a determination that officials of TD Bank were not only aware of false representations made by Rothstein but “provided substantial assistance to advance the commission of the fraud” against Coquina Investments, the South Florida Sun Sentinel reports.
In a lengthy deposition last month, Rothstein said he paid off a bank vice president, Frank Spinosa. While testifying at the trial, Spinosa invoked his right against self-incrimination 160 times, according to attorney David S. Mandel, who served as lead counsel for the plaintiffs.
A bank spokeswoman said it is disappointed with the verdict and mulling its options. TD Bank’s client was the Fort Lauderdale law firm, Rothstein Rosenfeldt Adler, not Scott Rothstein personally, she said.
Attorney Sam Rabin, who represents Spinosa, said his client did nothing wrong and was unaware of Rothstein’s fraud at the time.
“What’s lost here is because of a federal investigation, Frank Spinosa was taking the Fifth Amendment on his attorney’s advice and this was exploited in the civil case when they asked him loaded questions for which they had no good-faith factual basis,” Rabin told the newspaper.
Lawyers representing 55 other Rothstein investors seeking $200 million from TD Bank were cheery about the verdict, which attorney William Scherer, representing the Razorback group, likened to a caged canary lowered into a coal mine to test the air for poisonous gases.
“As a result of the verdict today, the canary died as far as TD Bank is concerned,” he told the Sun Sentinel.
Rothstein, who has been convicted and disbarred, is serving a 50-year federal prison sentence.
ABAJournal.com: “Imprisoned Ex-Attorney Says Cash Bribes, Call Girls at Law Firm Condo Aided $1.2B Ponzi Scheme”