Fraudulent Buyout?

[LarryWanter]

What is the name of your state? FL

This involves a buyout of a partner in an NASD broker dealer. Peter is an NASD principal in FL. He buys out John's 1/3 of company for $50,000 - John's on the west coast. Larry (me) owns the other 1/3rd. Peter knows the firm is getting a BIG contract - he does not tell John. John's 1/3 now is worth at least to $500,000 and maybe $5 M. Peter also buys out John with embezzled money from another company he is involed with.

John later finds out he has been cheated by misrepresentation of value. John will have to file a civil suit.(?) Was the transaction/contract unenforceable due to misrepresentation and because Peter used stolen money? Can John go to the NASD and SEC?

 

[tranquility]

I don't know anything about the NASD or SEC, but partners have certain duties to each other. By knowing of a contract, not telling a partner and then buying a partner out for less that the true value of the partnership, one of those duties may have been breached. Have the ex-partner see an attorney.

The "embezzled money" is not your problem, nor is it related to your issue. Actually, your ex-partners issue.

 

[tadpole]

banking

Well seems you got ripped off, I recently felt the same way also.
cd's in my dad's name mentioned in his will has disappeared.
Executor cannot account for this. Tadpole

 

[LarryWanter]

I don't know anything about the NASD or SEC, but partners have certain duties to each other. By knowing of a contract, not telling a partner and then buying a partner out for less that the true value of the partnership, one of those duties may have been breached. Have the ex-partner see an attorney.

The "embezzled money" is not your problem, nor is it related to your issue. Actually, your ex-partners issue.

It's a corp not a partnership. Is there still a duty like a fiduciary duty?

 

[Dandy Don]

In reply to tadpole's response only, tadpole you need to be contacting the bank where the CD's were held to get specific information about when they were cashed in and who was paid. It is possible your father decided to cash the CD's in before the maturity date to get income, or it is possible that someone else did it. Bank will normally release such information only to the executor, so you may want to consult with a probate attorney first about how to proceed with your request for information.

You also need to inquire to see if this executor has posted an executor's bond (to protect the beneficiaries interest from potential theft by the executor) or whether the state law or the will provides an exemption from the bond being required.

DANDY DON IN OKLAHOMA ([email protected])

 

[tranquility]

If it's a corporation, why are you talking partners?

Anyway, there are duties of people depending on their position in corporations as well. Executives have certain duties to the corporation and members of the board of directors have certain duties to stockholders--especially if the corporation is closely held. However, the relationships and duties are more fuzzy in the corporate setting and more facts would be need to see the relationships and duties to which persons we're talking about.