"Princeton Note" Securities/RICO Litigation
Lieff Cabraser represented three Japanese financial institutions in lawsuits against Martin A. Armstrong, HSBC, Inc., the successor-in-interest to Republic New York Corporation, Republic New York Bank and Republic New York Securities Corporation. The cases were filed on behalf of Kofuku Bank, Ltd., Namihaya Bank, Ltd., and Kita Hyogo Shinyo-Kumiai (a credit union) were filed in Federal District Court in Manhattan, and included claims for violations of the Federal Securities and Racketeering laws. Kofuku Bank Ltd. and Namihaya Bank Ltd. v. Republic New York Securities Corp., et al., No. 00 CIV 3298 (S.D.N.Y.) and Kita Hyogo Shinyo-Kumiai v. Republic New York Securities Corp., et al., No. 00 CIV 4114 (S.D.N.Y.).
The cases concerned the sale of notes to Japanese institutional investors through an interconnected web of companies, known as the Princeton companies, owned and controlled by a New Jersey-based operator, Martin A. Armstrong, and the Republic companies. The Princeton and Republic companies promoted and sold "Princeton Notes" to many of the largest companies and financial institutions in Japan through allegedly fraudulent misrepresentations and nondisclosures concerning use of the proceeds of the investments and the value of individual investment accounts.
While Armstrong allegedly told his investors he was buying U.S. government securities and trading currencies to hedge those investments, he made speculative trades in commodities and currencies, and engaged in a Ponzi scheme. Armstrong's trading consistently lost money. Between 1995 and 1999, Armstrong allegedly lost $556 million on the trading. In addition, the plaintiffs alleged that their monies were commingled and diverted to the benefit of the Armstrong, and the Princeton and Republic companies.
In December 2001, the claims of our clients and those of the other Princeton Note investors were settled. As part of the settlement, our clients recovered more than $50 million, which represented 100% of the value of their principal investments less money they received in interest or other payments.
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP is a fifty-plus attorney law firm that has represented plaintiffs nationwide since 1972. We have offices in San Francisco, New York and Nashville. We represent plaintiffs in class and group actions and in individual lawsuits in cases involving substantial losses. For the last five years, the National Law Journal has selected Lieff Cabraser as one of the top plaintiffs' law firms in the nation.
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