The plaintiff states that he was reasonably induced to invest heavily in a hyped investment opportunity promising a "healthy return."
A California arbitrator subsequently ruled that the investor was entitled to a $3.4 million judgment in the wake of that opportunity proving to be falsely promoted and without merit.
The case details that are materially relevant to the above matter can be quickly sketched. The investor is a Southern California entertainment attorney who was persuaded to put money into a scheme by a client owning a television production company. The complaint filed by the plaintiff recently in a state trial court contends that his investment followed due diligence concluding that the TV executive commanded personal wealth of more than $80 million linked with a family trust. Reportedly, that trust never existed, with plaintiff stating that he has never received any of the money awarded as damages by the arbitrator.
It is that non-payment which is driving the current litigation. The defrauded investor (the arbitrator likened the investment vehicle to a "Ponzi scheme") is suing an attorney partner from the large Los Angeles-based law firm of Sheppard Mullin (along with the firm itself) for abetting the producer's fraud. His complaint alleges legal malpractice, fraud, negligent misrepresentation and breach of fiduciary duty.
The plaintiff specifically alleges that the attorney confirmed the phantom trust's existence and the producer's substantial wealth tied to it. The complaint includes a statement from a family member of the producer questioning why anyone "would make such false representations."
The lawsuit seeks $4.3 million in damages.