In a recent closely watched case in Boston’s U.S. District Court, a federal jury took less than two hours to reject arguments that Sovereign Bank should have protected non-customers from a $32.6 million Ponzi scheme run by Bradford C. Bleidt, a confessed con artist now serving an 11-year sentence in federal prison.

"The jury firmly rejected the notion that bank tellers and branch managers somehow should police the outside business activities of the bank’s customers," said veteran attorney Patrick T. Voke, who won the Dec. 24 defense verdict as head of a legal team from LeClairRyan’s Boston office. "Their message was that investors have a responsibility to watch their own money. They cannot take it on faith that people like Bleidt will be trustworthy."

According to authorities, Bleidt defrauded 125 of his clients over a 20-year period beginning in the 1980s. Bleidt’s asset management company maintained a business operating account at Sovereign Bank from 2000 to 2004.

Bleidt’s investors sought to persuade the jury that banks must investigate, detect and expose duplicitous actions by their customers – even in the absence of any clear and compelling evidence of fraud. If the jury had accepted that argument, the implications for the banking industry would have been far-reaching, noted Voke.

"Such an expanded policing role for banks would do more than alter the relationship between banks and their customers. It would change the very economics of retail banking," Voke said.

"The bank has tremendous sympathy for these investors," Voke said. "But there is a lesson to be learned. Investment account statements can be faked. Investors and their representatives must take it upon themselves to investigate whomever they rely on for financial advice and to monitor their own investments, rather than relying on the word of others. As has become clear in recent months, blind trust and lack of diligence by investors can be catastrophic."