Reed Slatkin's former bankers have agreed to pay $26.5 million to settle a lawsuit claiming that they helped him appear to be a legitimate investment advisor while he ran a Ponzi scheme worth $593 million over 15 years. The lawsuit claims that the banks participated in the fraud by providing Slatkin with credit and overdraft protection, allowing him to comingle personal and investor funds and lending their names and prestige to his operations.
Kirkland & Ellis LLP partner Alexander Pilmer, who represented a group of the largest Slatkin investors, said that his clients are to receive about $15.5 million of the proposed settlement. An additional $11 million will be set aside to cover losses and legal costs for hundreds of additional investors.
This article appeared in its entirety in the September 14, 2004 issue of the Los Angeles Times.