Jim Eccleston: Panel Orders B-D to Indemnify Group of Investors | Investors
From the Desk of Jim Eccleston at Eccleston Law:
An all-public Panel in Madhany v. King ordered a broker-dealer, Citigroup Global Markets, Inc. (“CGMI”), to indemnify a group of investors for a judgment of up to $10 million and to pay them an additional $1 million in compensatory damages that they incurred as a result of a real estate financing investment. Respondent, Scott Andrew King, was not assessed any portion of the awarded amount.
The causes of action related to Claimants’ investments, including two promissory notes used to finance real estate developments known as Moorings at Carrabelle Inc., Moorings Development Inc., and Pirates Cove Marina LLC. The Panel found Respondent CGMI liable for breach of fiduciary duty as financial advisor to Claimants as well as negligent supervision. The Panel determined that Claimants and other investors signed a loan guarantee in an effort to protect their investment in the Moorings in the amount of $12,000,000.00. As a result of the guarantee, a judgment was entered against Claimants and the other investments, jointly and severally, in the amount of $10,031.220.25. Evidence was introduced at the hearing which indicated that Claimants had attempted to settle their liability on said judgment for the sum of $2,100,000.00 but no evidence was introduced to indicate whether said offer was accepted.
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