Members of a wealthy Vermont family say a $27.6 million judgement against their former financial advisor is justified after he allegedly misled them about the risks of an investment and failed to disclose his potential conflicts of interest.
A New Hampshire jury previously sided with the Hoehl family, finding that Ronald Roberts, a Bedford money manager, violated his fiduciary duty through a series of investments in a risky start-up company.
Roberts died from cancer earlier this year. Attorney Laura Carroll, who is representing his estate, told New Hampshire Supreme Court justices on Wednesday that the $27 million verdict should be overturned, pointing to repeated disclosures about investments in the company, G-Form, that were provided to the Hoehl鈥檚 over a seven-year period. She alleged the family waited too long to file its claim, and that the Hoehl鈥檚 had opportunities but never asked about the investments in the company.
鈥淵ou need to look at your bank statements,鈥� Carroll said. 鈥淵ou don鈥檛 get to wait until then to say, 鈥楴ow I鈥檓 damaged, now I鈥檓 upset.鈥欌��
The Hoehl family amassed considerable wealth after founding and later selling a medical technology company, IDX Systems, based in South Burlington, to IBM for $1.2 billion.
Roberts and his business partners managed the family鈥檚 money, and in 2012, approached them about an investment in G-Form, which at the time focused on foam-based protective equipment for athletes.
Lawyers for the family contend that they weren鈥檛 aware that Roberts himself would eventually take a seat on G-Form鈥檚 board of directors, or that he loaned the company more than $26 million of their money. Those loans would eventually turn sour as G-Form continued to lose money.
鈥淗e preferred G-Form鈥檚 interests to [the family鈥檚], something that the Hoehl鈥檚 could not, should not, and did not know, until early 2019,鈥� attorney Scott Harris told the court.
The family did receive quarterly investment statements from Roberts which listed its holdings in G-Form under the category of 鈥渁lternative investments.鈥� The family claims, however, that it was not aware of the size of the loan, or that Roberts himself was eventually awarded 750,000 shares in the company, potentially clouding his judgment about whether the company was worthy of further investment.
During oral arguments, justices asked multiple questions about Roberts鈥� duty as a fiduciary advisor to the family, and whether the burden to inquire about his investments fell on the family.
