In the wake of an alleged multi-million dollar Ponzi scheme run by attorney Anthony J. Lupas, the Pennsylvania Supreme Court has adopted new rules for attorneys in order to deter similar behavior in the future.
According to changes to the Rules of Professional Conduct, lawyers will be banned from “brokering, offering to sell, selling or placing any investment product unless he or she is separately licensed to do so.” Lawyers will also be prohibited from recommending or offering investment products if they have a financial interest in the transaction. The new rules further require attorneys to maintain detailed ledgers on client money and allow for the immediate suspension of attorneys who do not promptly provide financial records to the Office of Disciplinary Counsel.
According to prosecutors, Lupas conned a number of his clients by guaranteeing annual tax-free investment returns of seven percent or greater. Lupas, however, allegedly took their money for himself, using cash from new investors to pay earlier investors. His scheme collapsed in 2011 when Lupas was injured in a fall in his office and was unable to keep up with the payouts.
Chief Justice Ronald Castille stated that “the Lupas matter is one of the most egregious cases of attorney theft of clients’ escrow funds that I have seen in the 20 years that I have been on the Supreme Court.” A spokeswoman for the Administrative Office of Pennsylvania Courts confirmed that the Lupas case influenced them into making new rules.
If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.