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receiverships

Conrad O’Brien’s attorneys represent court-appointed federal and state receivers in actions brought by the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and other government enforcement agencies to recover assets used to compensate nationwide victims of Ponzi schemes and other frauds. 

In these highly complex cases, Conrad O’Brien assists the court-appointed equity receiver who is charged by the court to marshal, pursue, preserve, and maximize the recovery of receivership assets.  Often this involves significant third-party litigation, clawback procedures, and court-approved settlements. 

Conrad O’Brien’s attorneys, assisted by retained experts where appropriate, trace and maintain assets; identify and investigate potential claims available to the receiver, which may include perpetrators and others with varying levels of involvement in the underlying scheme including, for example, marketers, payment processors, financial institutions, accountants, and lawyers; and initiate multiple lawsuits pursuant to a broad range of substantive causes of action, including claims under the Uniform Fraudulent Transfer Act and  the Uniform Commercial Code, accounting and legal malpractice, unjust enrichment, breach of fiduciary duty, and breach of contract.  

In addition to collecting the assets, Conrad O’Brien’s attorneys assist receivers in designing, implementing and obtaining court-approval for claims procedures and distribution plans in order to provide restitution to victims and other aggrieved parties of the underlying fraud. 

Representative matters include the following: 

  • Conrad O'Brien represented the court-appointed receiver in an SEC enforcement action against the operator of a Ponzi-like scheme who stole tens of millions of dollars from investors in hedge funds he managed.  Through actions or threatened actions against company insiders, accountants and "net winner" investors, recovered and restored to innocent investors nearly 80% of the funds invested.
  • Conrad O’Brien represented a federally-appointed receiver in an enforcement action brought by the federal government against a third-party payment processing company and its principals (who were alleged to have facilitated a nationwide fraudulent telemarketing scheme).  Conrad O’Brien’s attorneys successfully recovered over one million dollars from a national bank to fund a Consumer Restitution Program for victims of the fraud.  Our efforts against the bank uncovered information that launched further government action, resulting in the recovery of more than $150 million to fund a full restitution program for the victims.
  • Conrad O’Brien represents the receiver in an enforcement action brought by the Federal Trade Commission against a number of related telemarketing businesses alleged to have been involved in the marketing of fraudulent credit cards.  The case settled with the defendant business operators for more than $7.5 million, providing nearly 100% restitution to the victims.
  • In addition to our work representing receivers, we have represented targets of receivers.  For example, we represented officers and directors of a company in liquidation in lawsuits brought against them by the statutory liquidator and in corresponding lawsuits we filed on their behalf against insurers seeking coverage for the costs of litigating these claims.  
  • We also represented the former General Counsel of an insurance company in a lawsuit alleging, inter alia, negligence, breach of fiduciary duty, and corporate waste brought by the Department of Insurance as liquidator of the defunct insurance company.  Likewise, we defended a large Philadelphia law firm in a similar lawsuit brought by the Insurance Department as liquidator of a medical malpractice insurer.  In both cases, we achieved a settlement for our client.
  • Conrad O'Brien presently serves as court-appointed federal equity receiver in a Federal Trade Commission enforcement action pending in the federal district court for the Western District of New York brought against a number of related entities and individuals in the debt collections industry alleged to be in violation of the Fair Debt Collection Practices Act and related state statutes.  As receiver, responsible for winding up all entities in the receivership and maximizing the remaining available assets by limiting liabilities, liquidating physical assets and assessing potential claw back claims to recover funds fraudulently transferred out of the receivership.