Main Line investor, firm sued in Fla. Ponzi scheme
Main Line investment adviser Barry R. Bekkedam and his firm, Ballamor Capital Management Inc., have been added as defendants in a Florida lawsuit related to a $1.2 billion Ponzi scheme.
Main Line investment adviser Barry R. Bekkedam and his firm, Ballamor Capital Management Inc., have been added as defendants in a Florida lawsuit related to a $1.2 billion Ponzi scheme.
The civil lawsuit, filed in Broward County for investors who lost $120 million in a scheme by Fort Lauderdale lawyer Scott Rothstein, alleges that Bekkedam played a key role in raising money for Rothstein while making false statements and misrepresentations to investors.
"This is an attorney grandstanding to acquire additional plaintiffs and is something that doesn't even require our response," Bekkedam said Wednesday, referring to Fort Lauderdale lawyer William R. Scherer, who filed the second amended complaint a day earlier.
"This business that I'm trolling for clients is ridiculous," Scherer said after being told of Bekkedam's comment.
Bekkedam has said previously that his clients invested $30 million in Rothstein's fraud through the Banyon Income Fund, which was based in Fort Lauderdale, but he has denied being paid to raise money for Banyon and has denied doing anything illegal.
Rothstein pleaded guilty in January to five criminal counts.
Banyon investors were promised a 15 percent return on money that would be used to buy legal settlements. Two Philadelphia area investors who looked at the deal declined to invest their money because certain aspects of it did not make sense to them.
Plaintiffs in the 1,300-page Florida lawsuit invested $56.5 million in Banyon.
Among them was Hilary Musser, ex-wife of Safeguard Scientifics Inc. founder Warren "Pete" Musser, the lawsuit states. Hilary Musser, who is remarried and lives in Palm Beach, Fla., invested $900,000 last August after Bekkedam allegedly told her that the Banyon fund "represented the highest return with the lowest possible risk of any venture that he had ever handled," the suit says.
The allegations in the lawsuit come as Bekkedam, who founded his once-fast-growing firm in the late 1990s, sees his professional world unravel.
In a letter last month, he told clients he was getting out of the investment-advisory business because fallout from the Rothstein investments "made it impossible for me to continue Ballamor as an independent wealth manager."
In an interview Monday, Bekkedam said he had not sold Ballamor, but had reached a "cooperation agreement" with Family Endowment Partners L.P. and advised his clients to move their investments to the firm in Waltham, Mass. Family Endowment Partners has hired some of Ballamor's employees.