Best-selling novelist Patricia Cornwell has won a $50.9 million judgment against her former accounting firm Anchin, Block & Anchin LLP and a former principal at the firm who acted as her money manager.
Cornwell had sued the firm and former Anchin principal Evan Snapper, blaming them for bad financial advice, unsuccessful real estate deals and an overly aggressive investment strategy that cost her a sizable amount of her fortune (see Novelist Patricia Cornwell Blames Accountants for High Spending).
The lawsuit accused the firm of acting negligently and in breach of its fiduciary duties in managing the financial affairs of Cornwell and her partner, McLean Hospital neuroscientist Dr. Staci Gruber.
Cornwell accused the firm of improperly investing $89 million of her fortune and making illegal campaign contributions that attracted scrutiny from the FBI, according to the Los Angeles Times. She charged that the firm engaged in high-risk investment strategies without her approval.
Cornwell paid the firm $40,000 per month to manage her finances, renovate her Concord, Mass., estate and lease an apartment in Trump Tower in Manhattan for her. The firm blamed her financial losses on the economic downturn along with an extravagant lifestyle, including private jets, helicopters and expensive sports cars.
She sued the firm for negligence and breach of contract, claiming that her net worth had dropped to under $13 million even though she had earned eight figures each of the prior four years, according to The Guardian. She also blamed the firm for causing her to miss a book deadline for the very first time, leading to the loss of $15 million in book advances and commissions, when Anchin was unable to find her a quiet place to write during a lengthy renovation of her estate.
Anchin was also accused of excessive and unauthorized billing, failing to put the clients' interests ahead of its own, and gross mismanagement of Cornwell’s and Gruber’s money over four and a half years, which resulted in the loss of millions of dollars.
A jury in a Boston federal courtroom found in Cornwell’s favor on Tuesday following a seven-week trial. On her Twitter page, Cornwell tweeted, “Justice!” followed by, “Thank you and God bless tweety friends! Your support has helped more than you know," followed by, "I wish I could hug the jury!" and then “7 weeks for this jury. They are heroes. Thank you jury!”
“We are deeply gratified by this victory,” Cornwell later said in a statement. “This case was about a lot more than financial mismanagement. It is our belief that Anchin, Block & Anchin not only took advantage of us, they also tried to damage our reputations and put us in legal jeopardy.”
The trial was “extremely painful and expensive” to go through, Cornwell said, adding that “it would have been far easier to settle or walk away, but we felt we owed it to ourselves and to others who have been victimized by financial advisors to have our day in court.”
“We thank the jury for their diligent and thoughtful service,” Cornwell said. “A portion of the monetary verdict we receive will go to McLean Hospital for psychiatric research.”
The trial was held before U.S. District Court Judge George A. O'Toole, Jr. at the John Joseph Moakley U.S. Courthouse in Boston. Along with the $50.9 million judgment, under Massachusetts law, Judge O'Toole may also award Cornwell and Gruber payment of their legal fees and multiple damages in a subsequent proceeding.
Anchin managing partner Frank A. Schettino expressed dismay at the verdict. “We are disappointed with the outcome of this case,” he said in a statement. “In the days ahead we will be exploring our legal options including appeal of today’s verdict. For more than 90 years, the professionals at Anchin have built a reputation for honesty and integrity. The firm will endure despite today’s outcome. We are eager to return to our business and continue providing the highest level of professional services our loyal clients have come to expect.”