Wachovia Sued for Crippling Quadriplegic’s Trust

Craig Sklodowski, a resident of Columbus, NJ, filed suit today against his Trustee, Wachovia Bank in the Superior Court of New Jersey, Burlington County alleging that his Trust suffered tremendous financial losses as a result of the Bank’s grossly imprudent handling of his Trust Fund and the Bank’s conflict of interest.

According to the 22-page, 6-count complaint, “This lawsuit is NOT about an unhappy investor burned by his own greed in the high-tech bubble. This lawsuit IS about a Trust created solely for the support of a young quadriplegic accident victim and naming a bank as Trustee specifically to avoid imprudent investment behavior and tragic results … (and) the repeated and continuous failure of that Trustee bank to act as a prudent and responsible fiduciary … (resulting in) significant money damages to the Trust. … The defendants played fast and loose with the Trust assets as though they were dealing with a benefit casino night rather than a beneficiary’s nest egg he could ill afford to lose.”

Plaintiff Craig Sklodowski is a quadriplegic, paralyzed from the neck down and confined to a wheelchair as a result of injuries suffered when he was 22 years old. After Mr. Sklodowski received $2.5 million in settlement of claims resulting from his accident, which constituted his sole expected lifetime source of income, he was solicited by Wachovia’s predecessor bank, First Fidelity to protect the money in a Trust. Recognizing his youth, his disability, and lack of financial and business acumen, Mr. Sklodowski placed the $2.5 million in the hands of the defendants as Trustee, giving them full discretionary authority to invest and manage the assets of the Trust to meet his financial needs through the remaining 50+ years of his life expectancy.

“I chose Wachovia because they told me they had lots of experience in trusts and would watch out for my interests. I named them trustee to invest and manage my money so it will always be there to pay my health care and living expenses,” says Mr. Sklodowski.

But contrary to governing fiduciary standards and despite the obvious special needs of Craig Sklodowski, over the next 8 years, Wachovia invested as much as 90% of the Trust in common stock equities – as much as 40% of those equities in risky technology stocks, especially a few select high-fliers. Even when the technology market enjoyed a surging bubble that ballooned his $2.5 million portfolio to almost $9 million in paper gains, Wachovia failed to cash-in any of the gains. Even when Mr. Sklodowski wanted to cash-in some gains to finance home purchases and renovations, Wachovia convinced him instead to buy their mortgage products. Even when the economy began to cool down and the stock market began to correct itself, Wachovia missed numerous opportunities to realize gains, prevent losses or preserve Craig Sklodowski’s Trust.

After 8 years, Craig Sklodowski’s Trust realized few, if any, investment gains plus Craig Sklodowski was left with $2.2 million in personal debt to Wachovia. Craig Sklodowski was left in precarious financial, as well as physical, condition.

“When Wachovia agreed to act as Trustee, it agreed to be a fiduciary held to the highest standards of conduct and responsibility under the law”, explained Anne McHugh, Esq. and Betsy Sweetser, Esq., partners in the Princeton, NJ law firm Pellettieri, Rabstein & Altman, who represent plaintiff Craig Sklodowski. “Wachovia clearly did not meet those standards. Craig Sklodowski needed more, was promised more and had the legal right to more. This is absolutely unacceptable behavior. We will hold Wachovia accountable.”

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