February 2, 2012 3:57 PM
Greenberg Traurig Hit With Suit Alleging Fraud, Breach of Fiduciary Duty
Posted by Claire Zillman
An investor in a now-bankrupt California private mortgage broker and real estate loan provider claims in a potential class action brought against Greenberg Traurig that the firm, acting as the broker’s counsel, helped hatch a fraudulent scheme that bilked the plaintiff and other investors out of some $700 million.
The complaint, filed Monday in California State Court in Alameda County by investor David Nolan, claims that broker RE Loans, LLC—a secured lender to high-end residential and commercial real estate developers—collected the $700 million in question as of early 2007.
The problem, according to the complaint, is that RE Loans was struggling at the time to raise fresh capital in an effort to keep pace with its commitment and distributions as those loans sank into default and foreclosure—a fact the company allegedly hid from the investors.
The complaint further alleges that since its inception in 2002, RE Loans broke the law by failing to register its securities offerings with the SEC. Acting as
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