Hundreds Of Proposed Parties Barred From DBSI Ponzi Suit

Law360, Wilmington (May 22, 2012, 9:07 PM EDT) -- A Delaware bankruptcy judge on Tuesday refused to allow the litigation trustee for DBSI Inc. to add hundreds of defendants to a suit against broker-dealers that allegedly profited from the $500 million Ponzi scheme that sank the real estate investment firm.

The trustee, James R. Zazzali, launched an adversary proceeding in November 2010 against more than 100 broker-dealers seeking to claw back $48 million of alleged fraudulent transfers tied to the scheme. The trustee has since identified and sought to add as defendants 525 “registered representatives”...
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