Overview of the Davis Wright Settlement
An Oregon federal magistrate judge has endorsed a substantial $4.5 million settlement involving Davis Wright Tremaine LLP, which is aimed at resolving allegations related to its involvement in a purported real estate securities scheme. This recommendation by U.S. Magistrate Judge Jeffrey Armistead marks a pivotal step in a legal battle extending over 20 months, originating from a settlement agreement first struck in August 2022.
Judge Says $4.5M Davis Wright Deal Should Be Approved: Key Developments in the Case
On Monday, Judge Armistead moved to certify the settlement class, approving not only the settlement but also the proposed distribution plan along with attorney fees and expenses. This development follows a series of legal proceedings, including a preliminary approval by U.S. District Judge Marco Hernández in December, setting the stage for a final approval after a fairness hearing held on April 4.
Judge Says $4.5M Davis Wright Deal Should Be Approved: The Scope of the Settlement
The proposed $4.5 million settlement addresses claims against Davis Wright in three related legal actions: the primary federal investor suit; a state court case involving investors excluded from the federal case due to residency; and a receivership action in Washington state. Notably, the majority of the settlement fund—over $3.6 million—is allocated towards resolving claims in the federal suit, with the remainder settling additional claims.
Allegations Against Davis Wright
Investors have accused Davis Wright of representing entities such as American Equities and American Eagle Mortgage Management, during which time these entities allegedly orchestrated a fraudulent scheme to deceive investors out of millions. The seriousness of these allegations is underscored by SEC charges against individuals Ross C. Miles and Maureen T. Wile, who allegedly misappropriated $8.7 million of investor funds.
Opposition and Approval of the Settlement
Despite objections from Riverview Community Bank and Pacific Premier Bank, who argued that the $4.5 million was insufficient compared to the claimed $25 million loss, Judge Hernández dismissed their concerns, allowing the settlement to proceed towards final approval. Judge Armistead cited unanimous class member approval and the absence of any objections as strong indicators of the settlement’s fairness and adequacy.
Implications of the Settlement Approval
The approval of this settlement by Judge Hernández, anticipated following the positive recommendation, will lead to the dismissal of all claims against Davis Wright in the involved actions. This outcome not only highlights the potential for recovery in securities litigation but also underscores the legal complexities surrounding large-scale financial disputes.
Conclusion
The Davis Wright settlement serves as a notable example of the legal system’s role in addressing and resolving complex securities fraud allegations. As the case moves towards final resolution, it underscores the importance of legal oversight in financial dealings and the potential for significant recovery for aggrieved investors.
