Law Firm's $23M Cobalt Fraud Settlement Gets Nixed

Law360, New York (September 30, 2013, 1:48 PM EDT) -- A New York federal judge refused Friday to approve a $400,000 settlement between law firm Lum Drasco & Positan LLC and the receiver for Cobalt Capital Funding LLC related to a criminal $23 million securities scam, taking issue with the deal's provision barring future nonparty claims.

U.S. District Judge Kimba M. Wood found that since the agreement is conditioned on the issuance of a bar order on any future derivative claim against Lum Drasco and it allows the firm to declare the deal void if such...
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