Tuchman among swindled
TeleTech founder Kenneth Tuchman counts himself among a group of unwitting
investors that federal securities regulators say were swindled out of
millions of dollars by a California celebrity investment guru.
Tuchman -- one of Colorado's richest residents -- is suing his investment
advisory firm over the $2 million he lost in the Reed Slatkin Investment
Club, whose members included CNN legal anchor Greta Van Susteren and actor
Peter Coyote.
The investment club's bankrupt founder, Reed Slatkin, is under criminal
investigation for running an alleged $600 million Ponzi scheme.
Tuchman's lawsuit, filed last month in Denver District Court, accuses the
Pell Rudman Trust Co. of failing to conduct due diligence on Slatkin, who
filed for bankruptcy last May after he was accused of investment fraud.
Pell Rudman, based in Boston, says Tuchman's damage claims for breach of
contract and negligence are groundless.
A bankruptcy trustee's report lists Tuchman, chairman and chief executive
of the Denver customer calling-center giant Teletech Holdings Inc., as one
of more than 800 investors with claims against Slatkin's estate.
The Securities and Exchange Commission says Slatkin wasn't registered as
an investment adviser, even though he was managing nearly $600 million on
behalf of clients, many of them Hollywood celebrities and online
executives.
R. Todd Nielson, the U.S. Bankruptcy Court trustee in the case, said it
appears that Slatkin started the Ponzi scheme in 1986, using new
investors' money to pay bogus returns to old investors.
The Santa Barbara money manager is a co-founder of the Internet company
EarthLink, and once held a personal fortune of $122 million, most of it in
EarthLink stock.
In a report filed with the court, Nielson said 75 investors -- including
Coyote and Van Susteren -- invested $128 million and received $279 million
in payments. But the majority of Slatkin clients lost a collective $255
million, even though they were led to believe their money had grown 20
percent to 50 percent a year, the report said.
In the Colorado lawsuit, Tuchman claims he invested "substantial monies"
with Slatkin in early 2001, after assuming that Pell Rudman had acted on
his instructions to check out Slatkin.
"Unbeknownst to Tuchman at the time, Pell called no references about
Slatkin, conducted virtually no due diligence, and exercised no
independent judgment regarding the advisability of investing with
Slatkin," the complaint said.
Pell Rudman has yet to file a court answer to the complaint. But Holly
Stein Sollod, the Holland & Hart attorney representing Pell Rudman, said
her client "had no role in choosing the investment or duty to investigate
the investment."
Tuchman had over $50 million under investment advisory services with Pell
Rudman, but he made the decision to invest with Slatkin on his own, she
said.
Pell Rudman, a prominent investment firm that caters to wealthy families,
endowments and foundations, was acquired last August by Amvescap, the
London-based parent of Denver's Invesco Funds group.
The suit also names four other Amescap affiliates as co-defendants,
including Sovereign Financial Services Inc., a Denver venture capital
firm.
The complaint refers to a "client services agreement" in which Pell said
it would use "in-house expertise in the assessment of alternative
investment and business ventures." Although the suit said Tuckman
specifically asked Pell to check out Slatkin, the firm "failed to make a
simple inquiry" to determine if Slatkin was registered as an investment
adviser or was the subject of an SEC investigation. The SEC obtained a
court order on May 11 to freeze Slatkin's assets.
Tuchman's Denver attorney is Nancy Gegenheimer at Holme Roberts & Owen.
Tuchman and Gegenheimer didn't return phone calls.
Dow Jones News Service contributed to this report.
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TeleTech founder sues over $2 million lost in investment club
Rocky Mountain News
February 1, 2002
By John Accola, News Staff Writer
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