• Register
Return to: Home > News > Deloitte, others face $234.6m class action settlement in US over Ponzi scheme

Deloitte, others face $234.6m class action settlement in US over Ponzi scheme

Settlements totaling $234.6 million have been reached on behalf of approximately 1,600 investors in a proposed class action against various third parties alleged to have participated in or materially aided sales of securities by the failed, Oregon-based Aequitas companies. The settlement is believed to be the largest ever of a securities lawsuit in the state of Oregon. The settlements are subject to approval by the US District Court in Portland.

The class action lawsuit asserted that the Aequitas companies operated a Ponzi scheme from 2010 until finally collapsing and being shut down by the SEC in March 2016. The proposed class action lawsuit, which was initiated in 2016 in Oregon Federal District Court, seeks to recover investor losses from third parties who allegedly participated or materially aided in the sale of Aequitas securities. Aequitas sold hundreds of millions of dollars of securities and perpetuated the scheme for years, despite generating no profits, being dependent on new investor money, having no prospects for increasing revenues and being insolvent.

Defendants are the accounting firms Deloitte & Touche and EisnerAmper; law firms Sidley Austin and Tonkon Torp; TD Ameritrade; Integrity Bank & Trust of Colorado; and Duff & Phelps. Law firms Stoll Berne and Hagens Berman, on behalf of investors in Aequitas, sued the defendants as participants or material aiders under the Oregon Securities Law.

The estimated total gross recovery for the investors in the class action, including the pending settlements and estimated distributions from the court-appointed Receiver for Aequitas, is $298.6m to $311.6m. The class investors’ estimated total out-of-pocket losses are $263.8m. Class counsel will apply to the court for attorney fees and reimbursement of litigation expenses, to be paid from the settlement funds.

“This is a remarkable recovery, especially in the context of a Ponzi scheme, and we are incredibly proud to be able to return this much money to the victims,” said Tim DeJong of Stoll Berne.

“This settlement is a testament to our strong state securities laws and our tenacity in fighting for the investors for three years,” said Keith Ketterling of Stoll Berne. “We were prepared to take the case to trial, if necessary, but this settlement is a pretty extraordinary result that provides investors a substantial recovery without years of additional delay and risk.”

Top Content

    Nigeria: building compliance and engagement

    Opportunities created by regulatory and legislative changes in Nigeria are tempered by the fragile state of the economy, although practitioners are generally confident that conditions will improve over the next few years if appropriate steps are taken. Paul Golden reports.

    read more

    Ghana: a quest for consistency

    Ghana’s current economic profile would suggest a fertile landscape for purveyors of accounting services. But inconsistent approaches to compliance and application of standards – coupled with problems in the banking sector and consequent liquidity constraints – have created a challenging environment. Paul Golden writes.

    read more

    Drone technology: audit takes to the skies

    The movement towards a digitised era has already impacted the auditing profession in a number of ways, from blockchain to artificial intelligence. Now firms are taking to sky and using drone technology in their audits. Mishelle Thurai speaks to Big Four firms to find out more.

    read more

    SBC: a new alliance joins the market

    Jonathan Minter speaks to Paul Tutin, chair of founding firm Streets Chartered Accountants, about why the business and its European partners took the decision to launch their own association.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.