Investors, victims and even an international heir to a plastics empire took their grievances to court this week in several cases that involved financial advisors, including fraudster extraordinaire, Bernie Madoff.
Advisor Sued For Hiding Formosa Fortune
You think you have family drama? Just imagine the fuss when a $15 billion fortune is involved. The eldest son of the late Formosa Plastics Group founder claims a shady financial advisor illegally signed over control of the company to his half-sisters and then attemped to hide the money in trusts based in Bermuda.
Dr. Winston Wong is now asking the Bermuda Supreme Court on Wednesday to weigh in on his suit against his father’s personal financial advisor and the trusts in question. Advisor Hung Wen Hsiung allegedly set up the non-charitable trusts in secret and transferred the majority of Taiwanese industrialist Y.C. Wang’s estimated $15 billion fortune into Bermuda without Wang’s consent, allowing a minority of Wang’s family to control his fortune, according to statements by Wong’s attorneys to the local Bermuda news outlet the Royal Gazette.
The case in Bermuda is the fourth place that Wong has attempted to stake his claim to the Formosa Plastics fortune after his father died instate in 2008.
Can’t Blame SEC for Madoff Losses
The never-ending Madoff fallout continued Wednesday with another loss for investors. The Second Circuit Court of Appeals dismissed a suit seeking to hold the SEC responsible for failing to investigate and expose Bernie Madoff’s massive fraud scheme.
Although the appeals court said it sympathized with investors, its hands were tied. Because Congress enacted the discretionary function exception, the SEC’s conduct and investigations are shielded from investors’ $2.5 million negligence claims.
Investors may have lost this round; it is certainly not the last we will see of the seemingly endless Madoff-related litigation.
Advisor-Turned-Conman Gets off Easy
In a sentence considered too lenient by victims, a California judge sentenced a former investment advisor and owner of AGA Financial to a 10-year prison term on Monday.
Gary T. Armitage—along with his colleagues James Stanley Koenig and Jeffery A. Guidi—allegedly engaged in a 10-year, $200 million Ponzi scheme that swindled over a thousand victims out of retirement portfolios and drained savings accounts.
Using seminars on investment planning to target victims in California, Armitage and his co-conspirators told investors they were using their funds to invest in construction and real estate projects. But instead of gaining returns for clients, the projects failed and the trio spent investors’ funds to purchase luxury items including an 80-acre castle estate and a Lear jet.
Armitage copped to the 10-year plea deal in January, right before the trial in Shasta County Superior County Court was scheduled to start. Under the deal, Armitage is expected to be released in four years and serve out a 3-year parole period.