The New York Times reported on a lawsuit filed by Bailey Glasser. The article, titled “He Grew Up in the Shadow of the ‘Wolf of Wall Street.’ Then He Got Into Debt Settlement” (Saturday, February 10, 2024), details a debt settlement operation run by Ryan Sasson (the stepson of Stephen Drescher, a close associate of Jordan Belfort, the self-proclaimed “Wolf of Wall Street”) across several states and involving various entities and law firms – and even shoe designer Steve Madden – now facing serious civil fraud changes brought by the Consumer Financial Protection Bureau and the attorneys general of New York, Colorado, Delaware, Illinois, Minnesota, North Carolina and Wisconsin.
To cash out his stake in the company before the regulators pounced, Sasson sold the company to “to its employees, through a financial transaction known as an ESOP (Employee Stock Ownership Plan). The deal valued the company at $242 million. Mr. Sasson described the transaction as something of a gift to the employees — ‘our Strategic family,’ he called them — who had built the company. Mr. Sasson had, effectively, cashed out. His employees now owed 100 percent of Strategic.”
Bailey Glasser’s highly experienced ESOP team filed a lawsuit challenging the fair market value of the $242 million ESOP transaction, which the Times linked to in its article. In 2019, the ESOP trust allowed Sasson and others to reap an additional $104.5 million from the ESOP, supposedly because the company met certain targets. Sasson and the other defendants are trying to move the lawsuit to a secret arbitration proceeding and limit the damages to a fraction of the excess money paid to Sasson and others. A decision from the Second Circuit Court of Appeals on that issue is forthcoming.
Our award-winning and nationally ranked ERISA/ESOP team has deep experience in handling matters such as the one described by the New York Time article and has recovered hundreds of millions of dollars on behalf of employees and retirees. To learn more about our ERISA group visit here.
To read the New York Time article, visit here