Mike Lieb and Zoe Vallier secure $6 million verdict for victim of fraud, financial elder abuse
Attorneys at Ervin Cohen & Jessup LLP recently secured a $6 million verdict in favor of their client, an 87-year-old Arcadia man whose finances were devastated by the malicious actions of his financial advisor.
Plaintiff Michael Horner had recently lost his wife and sold their family home when he met defendant George Strong III, a member of a prominent local family who presented himself to Horner as a savvy financial advisor.
Horner turned over to Strong roughly $2.6 million in proceeds from the house sale for investments directed by Strong, with instructions from Horner to seek investments with “a moderate amount of risk” and a strategy designed to trail the market.
What should have been a relatively straightforward process for Strong instead turned into chaos - in the span of 15 months, he made over 10,000 trades and lost over 80 percent of the money. After the devastation wrought on Horner’s finances became apparent, he turned to Ervin, Cohen & Jessup partner Michael Lieb and associate Zoe Vallier to pursue litigation against Strong in Los Angeles County Superior Court.
Over the course of a bench trial, the court noted that Strong’s strategy appeared “grossly incompetent” and “completely contrary to Mr. Horner’s stated investment objectives (…) and at times did not make a lot of logical sense.” In the court’s decision and final statement in the case issued September 12, Strong was found liable for breach of fiduciary duty and financial elder abuse, as well as breach of contract and negligence.
In its ruling, the court characterized Strong’s actions as consisting of “manic, voluminous trading patterns (…) demonstrating despicable conduct which was carried on with a willful and conscious disregard of the rights or safety” of Mr. Horner. The court further found by clear and convincing evidence that Strong’s conduct was “despicable” in that it “subjected Mr. Horner to cruel and unjust hardship in conscious disregard of his rights.”
Following the issuance of the court’s tentative statement of decision, Horner elected not to pursue punitive damages in a Phase 2 trial due to his advanced age. The court thus awarded $2.556 million in compensatory damages which it doubled based on the court’s finding of financial elder abuse to $5.1 million. The court also exercised its discretion to award prejudgment interest of $970,000 under California Civil Code Section 3288, based on the court’s finding of oppression, fraud or malice.
Although Strong comes from a prominent family – he lives in a home known to locals as the “pink castle” in La Canada – Strong is seeking to discharge the judgment in bankruptcy.
“While Mike may still have a fight ahead of him to realize any substantial recovery, he is relieved that this judgment will hopefully prevent Strong from ever doing anything like this to someone else, as are we,” said Lieb.
Michael Lieb and Zoe Vallier of Ervin Cohen & Jessup represented Mr. Horner. Kevin Fitzgerald of JonesBell LLP represented Strong. The Superior Court case is Horner v. Strong Wealth Management and George G. Strong III, LASC CN: 21STCV17667. Strong’s bankruptcy case is filed in the Central District of California, CN: 2:22-13069.