Aequitas honchos.jpeg

Aequitas management team, shown here in happier days last summer, has been ousted. Investors filed the first of what promises to be multiple lawsuits targeting law firms and accounting firms that worked for Aequitas.

Investors burned in the flameout of Aequitas Capital Management have filed suit against Portland law firm Tonkon Torp and accounting giant Deloitte & Touche, claiming the firms enabled the massive Ponzi scheme allegedly masterminded by the Lake Oswego financial company.

"Investors trusted Aequitas and their trust was abused," said Keith Ketterling, of the Stoll Berne Lokting & Shlachter firm in Portland. "The law makes the lawyers and accountants responsible to the same extent as Aequitas, because these professionals are the gatekeepers, and their services lend credibility to the investments."

Read the complaint: Click here.

Tonkon Torp, one of the most respected corporate law firms in town, for several years represented Aequitas and helped prepare prepare financial documents for investors that were materially false, investors allege.

"The Aequitas securities could not have been sold without the legal services that Tonkon provided," investors claim in the new complaint.

Deloitte prepared the 2014 and 2015 audited financial statements for Aequitas, which painted a reassuring portrait of Aequitas' financial strength. Deloitte offered a so-called "unqualified" opinion in its 2014 audit that Aequitas' financials fairly and accurately represented the company's financial condition. The U.S. Securities and Exchange Commission now claims that Aequitas by 2014 was little more than a large Ponzi scheme, reliant on new investor money to cover its expenses.

The new complaint, filed Monday in U.S. District Court in Portland, is likely the first of many investor lawsuits. The commission's March 10 lawsuit accused Aequitas and three top executives of concealing the catastrophic condition of the company even as it continued to raise more than $350 million from investors.

The new complaint also names as defendants the Sidley Austin law firm and the EisnerAmper accounting firm, both of which also worked for Aequitas.

The complaint does not target Aequitas itself or any of its executives as defendants. A federal magistrate judge hearing the SEC case ordered a stay at least temporarily prohibiting investor lawsuits against Aequitas.

More than 1,500 people invested around $500 million in Aequitas. Ron Greenspan, a court appointed receiver put in charge after the SEC ousted the former executives, will attempt to liquidate Aequitas' assets and repay investors and lenders with the proceeds.

It's unclear whether those remaining Aequitas assets have much value. Greenspan urged U.S. Magistrate Judge Paul Papak to bar lawsuits against the company saying responding to litigation would take up all his time.

Twenty-five days since his appointment, Greenspan has yet to issue any sort of public report on his preliminary findings and has rejected all requests for interviews.

Investors are not waiting for the receiver. They're lining up to sue the professional firms that helped Aequitas remain in business, a common strategy in litigation like this.

"The Oregon Securities Law is a very powerful protection for investors," Ketterling said. "The auditors and lawyers are responsible for the investors' losses because they made it possible for Aequitas to sell the securities, by lending their names to the sales, allowing the audited financial statements to be used as sales materials, and preparing documents required for the sales to be completed."

Investors may also pursue their own financial advisers. The local firm paid hefty commissions and offered loans and other incentives to a national network of advisers who put their clients into Aequitas investments.

Even a member of Aequitas' own advisory board has lawyered up. Keith Barnes, a prominent local technology entrepreneur who agreed to serve on the Aequitas board, is one of several investors to hire the Miller Nash law firm to pursue legal action.

Neither Tonkon Torp nor Deloitte could immediately be reached for comment.

-- Jeff Manning

503-294-7606, jmanning@oregonian.com