Business & Investment Fraud Litigation
Business Fraud
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Investment & Business Fraud Lawsuits in Pennsylvania
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Investment or business fraud lawsuits in Pennsylvania may involve a whole host of assets and financial interests, including securities, funds, loans, cash, etc. Under Pennsylvania law, fraud is typically defined as any conduct calculated to deceive, such as an intentional misrepresentation, concealment or a false promise.
For example, a client is advised by an associate who owns an accounting firm to invest significant cash in a startup company in Pennsylvania. The accounting firm’s owner markets himself as a “managing partner” of the startup company, when in fact, he has neither any ownership interest nor any managing role in the company. The client is promised a quarterly return on his investment. After the first quarter, the client receives nothing and inquires with the startup company’s board of directors when he uncovers the fraud.
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Other Parties Liable in Business or Investment Fraud Lawsuits in Pennsylvania
In addition to fraud claims, business and investment fraud cases often involve claims of negligence, breach of fiduciary duty, bad faith, conflicts of interest, and professional malpractice.
Using the same example above, a critical issue is whether additional parties may be held liable. This depends on the investigation and development of facts, including:
- How did the client become acquainted with the accounting firm owner? Did a third party, such as an investment advisor, introduce them and under what circumstances?
- Ownership of the accounts involved (where was the client’s cash deposited?)
- Relationships of relevant business entities (are there any contractual, financial relationships between the accounting firm, the accounting firm’s owner, and the startup?)
- Did employees, agents, principals of either company have any knowledge of the accounting firm owner’s misrepresentations?
Morris Wilson Knepp Jacquette, P.C. has achieved the Best Law Firm rating by U.S. News & World Report in the area of commercial litigation since 2016. We’re dedicated litigators with over a century of collective experience, and we spare no expense in the pursuit of justice for our clients.
Business and investment fraud cases accepted across Pennsylvania, including Philadelphia, Bucks, Chester, Delaware and Montgomery counties. Call our firm for a FREE consultation. (610) 825-0500
Professional Malpractice and the Role of Insurance in Recouping Funds
In many investment or business fraud cases, clients are naturally concerned about recouping their investments. Proceeds from insurance claims may satisfy judgments or settlements.
Oftentimes, business fraud cases involve negligent conduct on the part of a financial professional, such as an investment or financial advisor, accounting firm, accountant, etc. Under Pennsylvania law, negligence claims may trigger professional malpractice insurance claims.
Again, using the example above, the investigation reveals that the accounting firm is owned by multiple parties who all turned a blind eye to the fraudulent claims. Despite hearing from multiple clients that the owner in question was marketing himself as a “managing partner” of a startup and encouraging clients to invest, the other owners did nothing despite the fact that the accounting firm’s charter and partnership agreement specifically prohibited the conduct.
Under these facts, the client who was fraudulently induced to invest may have a professional malpractice claim against the accounting firm, in addition to a fraud claim against the accounting firm’s owner. In this situation, a successful professional malpractice claim against the accounting firm may suffice to make the client whole.
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