Two big blowup in the securities business are making their way through the legal circuits. One being a $250 million Ponzi scheme that involved the Detroit-area investment manager Edward May and the other being the accounting firm, Doeren Mayhew Certified Public Accountants and Consultants of Troy, Michigan, endorsed companies that were fake.
The pivotal issue for investors in cases that involve outside parties is “reliance,” said Thomas R. Ajamie, whose eponymous law firm is based in Houston.
“Did these investors rely on the representations made by the clearing firm or the auditor? Cases will rise and fall on reliance,” Mr. Ajamie said.
He said that the ruling this month by the Supreme Court which shot down the “scheme liability” theory of many class actions will not prevent these type of lawsuits in the future.