Originally Posted by ProspectiveBum
Technically, according to the article, he lost $3M, with $12M sitting in a trust (I suppose since it's not in his account, you could argue that he "lost" it, but it's accounted for, and will presumably be returned).
Don't bet on it. Its not sitting in a trust , his lawyers are claiming it should be treated as if it was in a trust. From the WSJ:
"According to the filing, Messrs. Elway and Pierce had invested with Mr. Mueller for many years, but met with him in February to discuss setting up a separate fund that would make more conservative investments than the day-trading investments Mr. Mueller primarily pitched.
Messrs. Elway and Pierce then wired millions of dollars to Mr. Mueller in March 2010, "after receiving assurances from Mueller that the New Funds would not be mingled with any other funds … to be held in trust, in their respective names, in an account at Morgan Stanley," their filing said.
"The New Funds were to be held in a constructive trust … for Intervenors until they determined an agreed upon course of conduct," the filing said."
This is a different kettle of fish. The man is a crook, if you entrust money to a crook you are normally just a general creditor even if you didn't entrust it to a particular crooked scheme. If you wanted the money held in trust or escrow you set up an escrow account , you don't "wire millions"
This is especially true if the money somehow facilitated the crooked scheme. If the crook used the money to dupe other investors that he was solvent Elway will find it very hard to get the equitable relief of a constructive trust .