Tuesday, September 26, 2023
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Attorneys Sued in Ponzi Scheme

TAMPA (CN) - A federal class action claims the Sugar & Felsenthal law office provided private placement memoranda that helped Howard K. Waxenberg run a $130 million Ponzi scheme. Waxenberg killed himself on May 15, 2005 after the scam was discovered, according to the complaint.

Sugar & Felsenthal, an LLP based in Chicago, was formerly known as Sugar, Friedberg & Felsenthal, according to the complaint.

"Sugar and Felsenthal acted as counsel for Waxenberg and one or more of his entities through which this massive Ponzi scheme was perpetrated," the complaint states. "Sugar & Felsenthal prepared a private placement memoranda [sic] ('PPM') for HKW Trading Fund I, LLC and related offering documents which were furnished to Waxenberg's investors beginning on or about Oct. 1, 2003.

"The offering documents prepared by S&F omitted material facts and failed to make full, complete, and adequate disclosures regarding various material issues associated with Waxenberg and his entities, as detailed more fully in this complaint.

"Had S&F conducted a reasonable and adequate due diligence investigation, the Waxenberg Ponzi scheme would have been discovered and plaintiffs' losses avoided."

The putative class demands punitive damages. They are represented by Guy Burns with Johnson, Pope & Bokor.

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