Anchin, Block & Anchin Loses Court Battle In The Amount of $51 Million

A Federal Court jury in Boston unanimously found on Tuesday, Feb., 19 that accounting and business management firm, New York-based Anchin, Block & Anchin LLP (FY11 net revenue of $92 million) acted negligently and in breach of its fiduciary duties in managing the financial affairs of best-selling crime writer Patricia Cornwell and her partner, neuroscientist Dr. Staci Gruber.

In October 2009, Cornwell filed a lawsuit with the U.S. District Court of Massachusetts against Anchin and former principal, Evan Snapper. The trial began on Jan. 7, 2013 and the jury began deliberating on Feb. 14.

According to a New York Daily News article, Anchin, Block & Anchin and Snapper, were found negligent in its management of Cornwell and Gruber’s money, the court decided Tuesday. Known as an accounting firm, the New York-based firm operates a wealth management arm, Anchin Wealth Management.

In a statement issued on Feb., 19 by Anchin, Frank Schettino, MP of Anchin said he is “disappointed” with the case’s outcome and will explore the firm’s legal options, including appealing the 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,” Schettino said. “We are eager to return to our business and continue providing the highest level of professional services our loyal clients have come to expect.”

During the seven-week trial, The Boston Globe reported that, lawyers for Anchin, Block & Anchin and Snapper, said Cornwell’s losses were due to the economic downturn combined with her expensive taste. They also maintained she was a demanding client who relied on the firm for what amounted to concierge services, the newspaper said.

The lawsuit accused Anchin of excessive and unauthorized billing, failing to put the clients’ interests ahead of its own, and gross mismanagement of Cornwell’s and Dr. Gruber’s money over four and a half years, which resulted in the loss of millions of dollars.

In addition, Cornwell charged that the firm engaged in high-risk investment strategies without her approval. Under Massachusetts law, Judge O’Toole may also award Cornwell and Dr. Gruber payment of their legal fees and multiple damages in a subsequent proceeding.