Tuesday, April 26 2011 1:01 PM, EST $30M award in lawsuit against Nebraska broker Associated Press, The "AP Financial News"
OMAHA, Neb. -- A federal judge awarded $30 million Monday to more than 200 investors who claim they were defrauded by a pair of Nebraska City brokers.
The decision came in a class-action lawsuit filed in 2007 by former clients of Rebecca Engle and Brian Schuster in U.S. District Court in Omaha . It accuses them of improperly selling risky investments.
The $30 million judgment was against Schuster, a former Nebraska football player, and some of his investment firms. It does not include Engle.
J.L. Spray , an attorney for the investors, said Tuesday that he was pleased with the judge's decision but "it leaves the question of how much of this we'll be able to collect."
Schuster, who has since moved to Vermillion, S.D. , is representing himself in court. A number listed for him rang unanswered Tuesday.
Spray said the case against Engle has been put on hold pending her bankruptcy case in Arizona .
Schuster, 37, is scheduled to stand trial next month in state court on eight counts of security fraud. Engle, 57, has pleaded guilty to two counts and awaits sentencing. Several lawsuits and arbitration claims have been filed against them.
Most of the investors involved in the arbitration or lawsuits wanted conservative, stable investments with little risk because they were nearing retirement age or were already retired when they got involved with Engle and Schuster. They have said the brokers instead invested their money in high-risk enterprises in Florida and never fully explained the risks.
Engle and Schuster worked together in Nebraska City at times between 2000 and 2007. The brokers were affiliated with at least three different companies _ Capital Growth Financial LLC , Wachovia Securities LLC and VSR Financial Services Inc. _ during those years.
The investments at issue were sold when Engle and Schuster worked for Capital Growth . A settlement reached in 2009 gave investors almost $900,000 from Capital Growth and two of the firm's former employees.
The investors have said Engle and Schuster sold securities in two Florida companies, American Capital Corp. and Royal Palm . According to court documents, Engle and Schuster described the companies in glowing terms, but they were actually high-risk investments.
PrimEdge Inc. later bought American Capital and Royal Palm , and Schuster became the president and chief executive of PrimEdge . Both American Capital and Royal Palm are no longer in business.
