WHAT A HEEL: Lawyer Loses Class Action Recovery In Series Of Bad Stock Trades
Irvine, CA, attorney Sandeep Baweja, 39, pleaded guilty to one count of wire fraud and one count of obstruction of justice for losing nearly all of a $2.5 million class action recovery by day trading stocks on margin, reports The National Law Journal:
In 2007, Baweja filed a class action on behalf of current and former agents of ZipRealty Inc., alleging that their employer failed to pay certain sales commissions, refused to reimburse business expenses and made unlawful wage deductions. The case settled later that year for $3.55 million.
On March 10, 2008, U.S. District Judge S. James Otero of the Central District of California approved the settlement, which included about $887,000 in attorney fees for Baweja and his co-counsel, Ernest Franceschi, a solo practitioner in Los Angeles. Baweja received 75 percent of the fee award, according to an information filed with his plea agreement.
Approximately $2.5 million was deposited into an account at Union Bank of California for approximately 800 class members, according to court documents. Baweja clandestinely transferred all of that money, plus some of his awarded legal fees, to an online stock brokerage account with TD Ameritrade Inc., from which he began investing in the securities market. …
A State Bar of California security fund is expected to reimburse class members, according to court documents.
Baweja could be sentenced to as much as 30 years in federal prison and be fined up to $500,000.
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