The Expert Podcast

Here's a great article from The Wall Street Journal talking about how Wells Fargo isn't doing enough to police customer crimes. What they're talking about here is the bank being sued in some cases because it failed to detect alleged Ponzi schemes. When a Ponzi schemer or scammer takes money from victims, they often deposit it in a bank. Many times, the bank where the money goes does not perform enough due diligence when opening the account or monitoring the activity to detect fraud. Analytics, reviews, and audits on a bank account can easily reveal a scam through patterns of money coming in or certain types of corporate activity. When a bank fails to do this, they can be identified as a third-party enabler and have vicarious liability.

In the very famous Scott Rothstein Ponzi scheme case in South Florida in the 2000s, Scott Rothstein, an attorney, ran a huge Ponzi scheme, and one of his banks, TD Bank, was forced to pay back the victims because Rothstein had spent much of the money. This highlights the importance of looking at third-party liability. Another way to pursue recovery of a judgment is through insurance, specifically judgment preservation insurance, which is a risk management option. This insurance can be purchased from an insurance company and provides leverage in negotiations or appeals. If you somehow lose on appeal, the insurance company still pays you your money, covering the difference if the court reduces your verdict.
So, when faced with a situation where you've been defrauded or need to recover a judgment, exploring third-party liability and judgment preservation insurance can be crucial steps to ensure you don't lose out on a valid claim.