Topic: Class Actions
An article in this week’s New York Times summarizes the issues raised in an ongoing lawsuit against MetLife and two of its subsidiaries. The case involves a defunct real estate fund, Diversified Lending Group, run by Bruce Friedman, that offered a high guaranteed rate of return to its investors. The suit alleges DLG was introduced to the investors by MetLife agents and brokers, who themselves learned of the program in a company training session.
The suit claims that MetLife ignored red-flags that agents and brokers were promoting the real estate fund and that MetLife is liable even when investors only invested in the fund and did not purchase MetLife insurance products. The SEC shut down the fund in 2009 finding the fund to be a classic Ponzi scheme. Richard E. Donahoo of Donahoo & Associates, PC, one of the lawyers representing the plaintiffs argues, “This case is about aiding and abetting. Friedman, who was a felon, likely could never have obtained the millions from hundreds of people that he cheated without the legitimacy that a company like MetLife provided.”
For more information, read “MetLife Suit Raises Questions of Extent of Corporate Liability” from Monday May 30, 2016 New York Times.