Peterson v. Winston & Strawn LLP

Gregory Bell's mutual funds, run through Thomas Petters's Ponzi scheme, hired Winston & Strawn LLP (defendant) to revise a circular representing that the funds verified inventory and received direct repayments from legitimate institutions, even though Bell told Winston that Petters did neither. Winston nonetheless prepared the circular as directed. After the funds collapsed, their bankruptcy trustee, Ronald Peterson (plaintiff), sued Winston for malpractice, faulting the firm for not informing the funds' absentee directors of the fraud and for not correcting the circular's false statements; the district court dismissed the complaint under the doctrine of in pari delicto.