We love it when a jury hits a major financial giant punitive damages. It doesn’t happen often but that is because most banks and lenders would rather settle before going before a jury. Keeping the case alive long enough to get them to the jury is the trick.
Bank of America took just one of its billion dollar cases from the 2008 financial meltdown to a jury and lost… over a billion dollars! (Sadly an appeals court reversed the jury verdict but the case isn’t over yet.) Last month MetLife and its affiliate MetLife Securities took their chances in front of a jury. They too lost.
Lest you think MetLife isn’t a financial institution, it is. And a very big one. Earlier this year the federal Financial Stability Oversight Council labeled MetLife a “systemically important financial institution.” That may sound like a bunch of legal mumbo jumbo but the designation means that bank regulators considered MetLife to be a “too big to fail” banking institution.
In a recent court case, MetLife and its subsidiaries MetLife Securities and New England Life Insurance Co. were sued by Christine Ramirez, ironically a former bank loan officer. Ramirez claimed that MetLife sold her unregistered securities. She said her money was invested in a Ponzi scheme.
According to court records, Ramirez invested approximately $280,000 in 2008. The money was invested in a company called Diversified Lending Group (DLG). Shortly after her investment, the SEC shut down DLG. According to an SEC press release, DLG and its principal Bruce Friedman “raised at least $216 million from hundreds of investors nationwide, many of whom are senior citizens, by promising guaranteed high returns through real estate-related investments. Instead, Friedman diverted substantial investor money to ventures unrelated to real estate, and also misappropriated at least $17 million to support his lavish lifestyle, including purchases of a luxury home, cars, vacations, jewelry, and designer clothing for himself and an alleged girlfriend...”
Friedman fled to France and died in prison while fighting extradition back to the United States. His untimely death meant that the location of much of the stolen funds was never determined.
Between 2009 and the trial this summer, the SEC’s receiver has only been able to recover approximately 10 cents on the dollar. That meant Ramirez was still out approximately $250,000.
Ramirez sued the brokerage firms and her individual broker / agent because she said they had recommended the DLG investment. Financial advisors are supposed to do due diligence on the investments they recommend.
The case dragged on for years. Banks don’t often settle quickly. Instead they fight their cases with repeated procedural motions. In doing so, they also hope to outspend their adversaries and force them to settle when they no longer have the ability to pay legal fees. Ramirez didn’t give up, however.
Usually if you can make it to trial, most financial institutions will settle. You don’t read about many of these settlements because they are almost always sealed. Banks don’t want the public to know that lawsuits against big banks can be won.
Perhaps MetLife thought it had a winning case? Perhaps they thought the jury wouldn’t associate it with traditional banks? We are not sure. But the company could have settled and didn’t. Instead it went to trial last month.
On August 31st, a Los Angeles County jury awarded Christine Ramirez her missing money and approximately $15,000,000.00 more in punitive damages. Even the individual agent who serviced her account was hit with punitive damages of $360,000.
Is MetLife writing Ms. Ramirez a check? As this is being written, the company says it is “disappointed” with the jury and anticipates appealing. That means Ms. Ramirez, who has been waiting to get back her money for 8 years, may have to wait a couple years more. But the wait should be worth it!
That a jury hit MetLife with punitive damages doesn’t surprise us at all. Today almost every juror has their own banking horror tale.
What saddens us is how few lawyers are willing to sue “too big to fail” banks. Unfortunately, most lender liability lawyers represent banks, not consumers. Many of the lawyers that say they sue banks have limited experience and mostly handle foreclosure defense or bankruptcy matters.
Businesses and individuals often don’t know where to look for lawyers that sue banks. There are very few lawyers that truly concentrate in suing banks. Happily, we do. More importantly, we love what we do.
MahanyLaw and Judge, Lang & Katers are two separate national boutique law firms that sue banks, mortgage companies, insurers, loan servicers and fiduciaries. We join forces on large lawsuits against financial institutions. We also have reasonable Midwest rates and because we handle so many of these type claims, it takes us far fewer hours to get up to speed.
Please review the cases we handle on our website before calling us. Unfortunately, we don’t take cases under $5 million unless part of a larger class action.
For more information, contact attorney Chris Katers at [hidden email] or the author of this post, attorney Brian Mahany at [hidden email]. You can also call us at 877-858-8018.
MahanyLaw and Judge, Lang & Katers – “We Sue Banks”