A jury has found that Westport National Bank and its parent company, Connecticut Community Bank, were not liable for the losses of investors in Bernard Madoff’s vast Ponzi scheme in its role as a custodial bank, The New York Times reported.
Separately, the bank agreed to pay $7.5 million to 240 investors in a related case, the newspaper said, citing a lawyer for the bank.
A federal jury in Hartford had finished hearing eight days of evidence last month in a case that had consolidated three similar lawsuits against the bank. Two of those cases settled before the jury began its deliberations.
After the other cases settled, the jury did evaluate the bank’s custodial duties in a case brought by two Florida investors, but sent a mixed message, the Times said.
After 14 hours of deliberation, the jury said Wednesday that the bank was not a fiduciary, and thus owed no fiduciary duty to two elderly Florida investors, Audrey Short and Faye Albert, the newspaper said.
The jury ruled that the bank breached its custodian agreements when it calculated its fees based on the Madoff firm’s reports instead of on the actual assets it held.
It also said that the two plaintiffs had proved that the bank breached its agreements when it failed to issue accurate annual statements and failed to audit or verify the existence and value of the assets.
But the six jurors determined that neither plaintiff had proved that she suffered any economic loss as a result of the actions, the Times said.
“They found we failed to maintain accurate records, but they found that nothing the bank did caused any harm,” Tracy A. Miner, one of the bank’s lawyers, told the Times in a telephone interview. She said that the bank’s liabilities involving the accounts that were settled could have reached $70 million to $80 million.
Steve Gard, a lawyer for Short and Albert, said that he planned to file a motion within two weeks asking for a judgment in the investors’ favor because the jurors findings “are inconsistent,” the newspaper said.
