Ponzi Victims May Challenge Receiver’s Decisions

Two sets of investors caught up in an insurance-related Ponzi scheme didn’t get a meaningful chance to challenge a receiver’s decisions, the Eleventh Circuit ruled.

The district court’s authority to use a summary proceeding for a receivership matter—and the receiver’s need to act quickly to preserve the value of existing assets—don’t “outweigh an investor’s right to due process,” the U.S. Court of Appeals for the Eleventh Circuit said April 30.

James A. Torchia allegedly defrauded investors through a company called Credit Nation Capital LLC. “CN Capital and its investors purchased interests from third parties in life insurance policies, commonly called ...