According to the Associated press, the president of DBSI, David Swenson, was sentence to 20 years in federal prison by District Judge B. Lynn Winmill. The company’s former legal counsel, Mark Ellison, was sentenced to five years.
“Winmill said Wednesday that he didn’t believe the defendants set out to defraud their clients, but he said they concealed the company’s financial problems and continued to accept new investments when they knew the company was failing.”
Earlier this year, Swenson and his two sons were convicted of 44 counts of securities fraud and 34 counts of wire fraud. Ellison was also convicted of 44 counts of securities fraud.
According to the report, before DBSI filed for bankruptcy the company managed 280 commercial buildings in 34 states. “More than $102 billion in claims were filed in bankruptcy court.”
Although a restitution amount has not been set, prosecutors have said they will seek at least $75 million.However, it is unclear if DBSI or the convicted executives have the money. As such, The White Law Group continues to investigate other avenues for investors to recover their losses, including looking at the brokerage firms that sold these investments.
Brokerage firms that sold DBSI had a fiduciary duty to make investment recommendations that were suitable for each individual investor. They also had an obligation to adequately disclose all the risks associated with the investment.
Furthermore, brokerage firms are expected to perform due diligence to ensure that the investment had a reasonable likelihood for success. Brokerage firms that failed to adhere to federal securities law and FINRA regulations can be liable for investment losses.
If you would like to discuss your litigation options to recover investment losses in DBSI, please call (312)238-9650 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.