Rothstein Rosenfeldt Adler (RRA)

A 70-lawyer Fort Lauderdale law firm with a flamboyant managing partner who gave to charities and politicians and drove a fleet of exotic cars.

A Ponzi scheme run through the firm's trust accounts: investors bought stakes in confidential legal settlements that did not exist — no plaintiffs, no cases, forged documents on real letterhead — about $1.2B in all.

Scott Rothstein co-founded RRA in 2002 and used the firm's prestige — and its trust accounts at TD Bank — to sell investors, from about 2005, shares in confidential employment and harassment settlements that were supposedly paid out over time at a discount. The settlements did not exist; new investors paid old ones while Rothstein bought mansions, cars and political access. When the money ran out in October 2009 he flew to Morocco, returned within days, and was arrested on 1 December; creditors forced the firm into bankruptcy on 10 November. He pleaded guilty and was sentenced to 50 years in June 2010; TD Bank paid tens of millions in verdicts and penalties over its role.

Bankruptcy trustee Herbert Stettin settled with TD Bank (February 2013) and others, and the RRA estate paid creditors essentially in full. TD Bank lost a $67M jury verdict to investor Coquina (January 2012) and paid $52.5M in penalties to the SEC ($15M), OCC and FinCEN ($37.5M) in September 2013 for its role. Rothstein pleaded guilty and got 50 years (June 2010); about 30 associates were convicted.