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Florida Verdict Tightens Fraud Standards

Martinek Paul J. | April 3, 2007

A Florida appellate court has thrown out a jury award of nearly $1.6 billion—including $850 million in punitive damages—to billionaire Ronald Perelman in his lawsuit blaming investment bank Morgan Stanley for financial losses he incurred after receiving stock that later proved worthless in the sale of a camping-equipment company.

The trial judge had earlier whacked Morgan Stanley for its failure to produce troves of emails in the case, instructing the jury to presume that certain allegations against the bank had been proven. Florida’s 4th District Court of Appeal, however, didn’t even get to the controversial email ruling in overturning the verdict. The majority in the 2-1 decision said that Perelman had not shown that his company suffered any actual damages, and consequently, he wasn’t entitled to punitive damages either.

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