DLA Piper, Fox Rothschild Ask Judge to Toss Investor Ponzi Suit

DLA Piper LLP and Fox Rothschild LLP want a federal judge in Florida to dismiss a would-be class suit alleging the two large law firms knowingly aided and abetted a $170 million Ponzi scheme.

Investors who lost money to the scam haven’t plausibly alleged that DLA Piper and Fox Rothschild had actual knowledge of and provided material assistance to the purported fraud, the firms told the U.S. District Court for the Middle District of Florida in their motions to dismiss.

Paul Wassgren, a former Fox Rothschild partner who moved to DLA Piper, represented EquiAlt LLC before the public learned of the alleged scheme. He also filed a motion to dismiss the case.

The investors’ theory “requires acceptance of the dubious notion that over the course of nearly a decade, Wassgren risked his livelihood and professional reputation by knowingly and materially aiding his client’s fraudulent activity, in exchange for only standard legal fees,” Fox Rothschild said.

The Securities and Exchange Commission sued EquiAlt in February but hasn’t accused the law firms of any wrongdoing, DLA Piper said. “However improper EquiAlt’s conduct may have been, Wassgren, DLA, and Fox are not EquiAlt.”

The investors “attempt to manufacture knowledge from unsupported speculation and implausible conclusions,” DLA Piper said. “Without these conclusory assertions, the complaint describes nothing more than a transactional lawyer providing ordinary legal advice to a client.”

Bradley Arant Boult Cummings LLP and Williams & Connolly LLP represent DLA Piper. Gunster represents Fox Rothschild. Carlton Fields PA represents Wassgren. Casey Gerry Schenk Francavilla Blatt & Penfield LLP, Moskowitz Law Firm PLLC, Bonnett Fairbourn Friedman & Balint PC, and Sonn Law Group PA represent the investors.

The case is Gleinn v. Wassgren, M.D. Fla., No. 20-cv-01677, motions to dismiss filed 11/11/20.