The Latest Patricia Cornwell Mystery: Who Lost the Author's Millions?
On Tuesday, a jury in Massachusetts federal court awarded Ms. Cornwell $51 million in a lawsuit against money managers Anchin, Block & Anchin LLP, accused of bilking Cornwell of millions of dollars she'd entrusted to them.
Alleging various financial improprieties, from spending money on bat mitzvah gifts to interfering with the author's ability to meet a deadline on a new novel to simple improper accounting, Cornwell sued Anchin, Block in federal court in 2009 after discovering that they had reduced her net worth to only $13 million, despite having control over an income stream that ran to as much as $15 million annually over the previous four years -- call it $60 million in total.
In response, Anchin, Block cited its 90-year history of handling money for high-net-worth individuals as evidence of its "reputation for honesty and integrity." The firm blamed Cornwell's own extravagant living expenses, including the lease of a temporary New York apartment for $40,000 a month, and a generally poor stock market for the losses, denying any financial shenanigans on their own part.
It wasn't an impossible argument to make. After all, during the 2007-2008 financial crisis, the stock market did lose close to half its value. Now subtract a few years' worth of $500,000-a-year apartment living, and presumably similar extravagances on restaurants, haute couture, and entertainment. It's actually conceivable that a fund being diligently drained by its beneficiary on the one hand and eroded by a falling stock market on the other could lose 75 percent of its value without any need to infer foul play.
Still, such a loss wouldn't speak very well to the financial acumen of the money managers.
According to a statement from Anchin, Block, the firm is "exploring its legal options," and contemplating an appeal. It makes you wonder, though: Even if the money managers succeed on appeal and prove they're not crooks, will the net effect just be to prove themselves guilty of being really bad at managing money?
Rich Smith is a contributor to The Motley Fool.