Marshall lawyers sue Beaumont accountants after losing $6M in market collapse
MARSHALL-A Marshall law firm has filed a lawsuit against its former accountants for allegedly receiving kickbacks and violating ethical standards.
Scott Baldwin Jr.; SBJR Enterprises Inc., as general partner of Francis Scott Baldwin Jr. Family Partnership Ltd.; John B. Baldwin, as trustee of the Francis Scott Baldwin Jr. Family Trust; and the Baldwin Grandchildren's Trust filed suit against Clifford W. Cavett and the Beaumont accounting firm Cavett, Turner and Wyble LLP on Sept. 30 in the Eastern District of Texas, Marshall Division.
According to the lawsuit, in 1996 Cavett Turner and Wyble became the accountants for the plaintiffs and the law firm of Baldwin & Baldwin, of which Scott Baldwin and John B. Baldwin were partners. CTW performed standard accounting and tax work for the law firm, the Baldwin family and the family trusts.
The Baldwins state that over a three-year period, the defendants attempted to induce the family into firing their financial advisor and retaining them to perform accounting services and financial advice.
The plaintiff states that defendants were not qualified to provide financial advice for accounts containing millions of dollars.
The defendants are accused of soliciting the plaintiffs' business in order to unlawfully reap large commissions and hidden fees, according to the suit.
In addition, the defendants are accused of forming a partnership with a broker to handle the logistics of consummating trade. The plaintiffs allege that through this partnership the defendants received "kickbacks" in the form of unlawful commission sharing. The plaintiffs state the money was invested in high risk accounts contrary to their instruction.
"Once the markets began to collapse, Defendants convinced plaintiffs on numerous occasions over several months to hold his accounts in the stock market insisting that the market collapse was a temporary setback or a phase and would rebound in the near future," the lawsuit states.
The plaintiff states $6 million was lost because of the defendants' actions.
The defendants are accused of racketeering, fraud in the inducement, fraud holder claims, negligent misrepresentation, breach of fiduciary duty and negligence.
The plaintiffs are asking for an award of damage for breach of fiduciary duty, negligence, negligent misrepresentation and fraud, punitive damages, treble damages, an accounting, amounts constituting unjust enrichment, disgorgement of unlawful proceeds, attorney's fees, costs of suit and interest.
The family is represented by James Wes Christian and Scott Link of Christian Smith & Jewell in Houston.
U.S. District Judge T. John Ward is assigned to the case.
Case No. 2:10cv00401