LOS ANGELES -- "Good news, bad news" probably doesn't begin to describe the day Hollywood screenwriter Eric Roth had last week.
Roth was nominated Thursday for a Golden Globe award as screenwriter of
"The Curious Case of Benjamin Button." And that same day, he learned
that he lost all his retirement money to Bernard Madoff's alleged
$50-billion Ponzi scheme.
Roth, whose screenwriting credits include "Forrest Gump," indicated
that his losses were heavy, although he declined to give a dollar
figure. He said he had entrusted his funds to an investment manager he
had used for decades.
Although Roth declined to identify his financial advisor, the role of
the many investment managers who steered money to Madoff's New
York-based company will come under scrutiny in the months ahead as
investors look to them to recoup their losses.
One such investment firm, Brighton Co. of Beverly Hills, was sued this
week in federal court in Los Angeles. In the suit, Michael Chaleff of
Arlington, Va., said he and other investors had lost about $250 million
on investment partnerships that Brighton placed with Madoff.
The head of Brighton, according to the suit, is Stanley Chais of
Beverly Hills, a philanthropist who had served on charitable boards
with Madoff and who now describes himself as a victim of the money
Reed Kathrien, an Oakland attorney who is representing Chaleff, said he
would seek to have the suit certified as a class action on behalf of
all the investors who entrusted their money to Chais (pronounced
"Chase") and Madoff.
"A lot of them were in the entertainment business," Kathrien, with the
firm of Hagens Berman Sobol Shapiro, said of the investors.
He said many of those investors were "niche" workers who weren't
household names, but who lost small fortunes "because they'd been in
[the investment funds] for 10 or 20 or 30 years."
The suit alleges that the Brighton firm was "aware of, or recklessly
disregarded, the misuse and mismanagement of investment funds."
Chais could not be reached for comment Monday or Tuesday. But in its
online edition, the Jewish Journal of Los Angeles quoted Chais saying
he was also a victim and suffered large losses.
"Like everybody else who trusted and invested with Bernie Madoff, he betrayed my trust," Chais said.
Chais also told the publication that he not only personally invested
with Madoff but also "facilitated" others who wished to do likewise.
Spokesmen for the Securities and Exchange Commission and the California
Department of Corporations said they could find no record of Chais
registering as an investment advisor or a broker.
The Chais Family Foundation, which for more than two decades provided
substantial funding to global Jewish causes, shut down Sunday after
Madoff-related losses left it penniless.
Madoff's decades-long enterprise also entangled such high-profile
investors as director Steven Spielberg and Jeffrey Katzenberg, chief
executive of DreamWorks Animation SKG.
Katzenberg and Spielberg's Wunderkinder Foundation both had investments
with Madoff that were made on their behalf by their business manager,
Gerald Breslauer, according to people familiar with the situation.
Breslauer's Century City-based firm once represented the who's who of
Hollywood and the music industry. Today, the practice he and his
partner, Mickey Rutman, run centers around the affairs of Spielberg and
Katzenberg, according to several people familiar with the operation.
Hollywood Figures Snarled in Billion-Dollar Fraud Scheme
We've upgraded our reader commenting system. Learn more about the new features.