Quote:
Originally Posted by HarryBox
Clawback provision applies to investor fraud. That isn't the case here. In a ponzi scheme investors can have profits taken back even if there were unaware of the fraud. The rational is that those profits never existed and were merely the illegally transferred funds of other investors.
What you are looking for is "piercing the corporate veil". FTP is an Limited Liability Corporation, emphasis on Limited. While LLC does shield owner's personal assets from creditors there are exceptions.
One exception is criminal malfeasance on the part of corporation that the owner was aware of.
The DOJ wouldn't have anything to do with this. This is a civil matter between players who lost deposits and the owners of FTP. A law firm would file a suit on behalf of some of the players. They would argue that the owners WERE aware of fraud and as such their actions or inactions make their personal assets liable. If they win (see below) then law firm would use that to seek damages from owners directly. In essence the bad debt from FTP would transfer from the company to the owners.
Winning would require providing two elements:
a) that FTP did engage in fraud.
b) that the owner in question was aware that the fraud was going on.
Obviously no law firm wants the work to prove A so they simply let DOJ do it. If the DOJ wins their lawsuit and/or FTP settles AND ADMITS guilt then A has already been proven. That makes the likelihood of a lawsuit much higher as half the case has already been proven.
Some owners were aware of the fraud but some likely were not and for some it can't be proven. To prove at least some of the owners were aware would require some evidence (witness, board minutes, emails, etc) that owner in question was aware. The court would decide on a case by case basis for each owner on if the corporate veil is pierced.
Given US players are owed collectively ~$150M and any such case has a good chance of being certified as a class action lawsuit a willing law firm would be looking at collecting ~$50M (assuming full amount can be collected). So if DOJ wins and FTP shows no signs or ability to pay players it seems unlikely that no company would even try. Companies and owners get sued for a lot less than that.
