Law Firm Dealt Setback In Ponzi Malpractice Case

Law360, New York (August 20, 2009, 4:40 PM EDT) -- A judge has declined to stay discovery in a proposed malpractice class action against law firm Sugar & Felsenthal LLP, which allegedly failed to properly vet documents sent out on behalf of a client who then bilked investors in a $130M Ponzi scheme.

Since the claims in the suit are made under state law, not the Private Securities Litigation Reform Act, the automatic stay of discovery does not apply, said Judge Elizabeth A. Jenkins of the U.S. District Court for the Middle District of Florida, in...
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