Miami Federal Judge Sanctions TD Bank, Law Firm for "Simply Incredible" Discovery Errors During Rothstein Trial
- sanctions as determined by the Court;
- the referral of TD Bank to the United States Attorney's Office for possible obstruction of justice charges; and
- referral of defense counsel to the Florida Bar for an investigation into their role, if any.
In many ways, this is a case of too many cooks spoiling the broth. Over 200 Greenberg Traurig attorneys were involved in this case. There were separate teams of Greenberg Traurig lawyers to handle banking issues, document production, and pretrial and trial practice. TD Bank retained two different firms to work on different aspects of the Rothstein fallout, but the firms did not have any mutual coordination. One of the firms, Sullivan & Cromwell, then hired a consultant to perform work, which was relevant to the Rothstein litigation, but no one ever informed Greenberg Traurig. As a result, it often times appears that this litigation was conducted in an Inspector Clouseau-like fashion. However, unlike a Pink Panther film, there was nothing amusing about this conduct and it did not conclude neatly.
After a thorough review of the alleged discovery violations, Judge Cooke concluded that sanctions were warranted against Greenberg and TD Bank for a "pattern of discovery violations" that deprived Coquina of the ability to "drive home" to the jury that Rothstein's account warranted additional scrutiny. Noting that Coquina faced several post-trial motions challenging the sufficiency of the evidence out forth against TD Bank, Judge Cooke ordered that several facts, including that TD Bank’s monitoring and alert systems were unreasonable and that TD Bank had actual knowledge of Rothstein’s fraud, would be established as true for those actions. The second finding concerning actual knowledge is particularly damaging to TD Bank, as many previous attempts to hold financial institutions liable under these theories fell short of the heightened standard of knowledge required to impose liability.
Additionally, Judge Cook also ordered Greenberg and TD Bank to pay Coquina's fees and costs incurred in preparing its Fourth and Fifth Motions for Sanctions, as well as fees and costs associated with any litigation resulting from TD Bank's notice of the existence of the Standard Investigative Protocol documents. A specific request for those fees is due from Coquina's counsel on or before August 23, 2012. As to Greenberg's attorneys, Judge Cooke found that none had acted willfully or in bad faith, and declined to impose individual sanctions.
TD Bank indicated it plans to appeal Judge Cooke's ruling, as well as the jury verdict.
A copy of the Order is here.
A copy of Coquina's Motion for Sanctions is here.
Additional coverage of the Rothstein Ponzi scheme is here.
Paul Brinkmann, a reporter for the South Florida Business Journal, has also provided detailed coverage of the Ponzi scheme. You can view his articles here.