Marc Fitapelli is a New York-based commercial litigator that exclusively represents individuals and institutional investors. Fitapelli is often the center of high-stakes litigation against Wall Street’s biggest players. Over the years, Marc Fitapelli has helped countless investors recover hundreds of millions of dollars. We sat down with Marc as he takes a break from his work and prepares to celebrate fifteen years in practice.
What made you decide to start a law firm focused on investors and consumers?
For the last ten years, I have represented investors and consumers in cases against financial instructions, insurance companies, and big banks. Before that, I was an associate at a large law firm. At the time, my practice focused on commercial real estate transactions. When the real estate market crashed in 2008, clients began walking away from deposits. The idea that people would walk away from such a significant amount of money, without putting up any fight at all, surprised me. It didn’t surprise the senior partners at my law firm though. They all liked my enthusiasm, but explained that these clients had no case – their contracts were clear and I shouldn’t waste my time. I didn’t want to accept that. And I didn’t.
I became obsessed with finding a solution for these clients. I spent hours doing legal research in the library (yes, a real library with actual physical books). Eventually, I discovered that many new high-end residential developments were not in compliance with an obscure federal law known as the Interstate Land Sales Full Disclosure Act. This law was a 1960s era law designed to protect purchasers of undeveloped land. If the law applied to your deal, then certain disclosures need to be made or you would be entitled to your deposit back under federal law.
To the surprise of everyone (including many upset real estate developers), I was able to successfully use the Interstate Land Sales Full Disclosure Act to help clients recover significant amounts of money. The law was changed in 2014 after tremendous pressure from the real estate community. These cases gave me the hunger and desire to start my own law firm. I didn’t want to be constrained by billable hours and wanted to offer creative solutions to clients who had difficult and complex legal problems.
I continue to love the challenge of taking on high-dollar cases that are viewed as “unwinnable” by other attorneys. As I’ve become older and wiser, I have become much better at distinguishing complex and difficult cases from those that simply are uncollectable or unwinnable. As I often tell my clients, I am a securities lawyer, not a magician!
What do you feel are the biggest challenges in the securities industry?
President Ronald Regan once said the nine scariest words in the English Language are “I’m from the government, and I’m here to help.” He was right by the way. Politicians don’t understand securities regulations and only take meaningful steps to protect investors when there is a big national emergency. How many calls did your congressman receive about Regulation BI? Exactly.
In order to fix this problem, we must focus on enacting common-sense regulations that are proactive rather than reactive. It’s like making repairs to your home. Congress always waits until our kitchen is flooded before it decides to patch the proverbial hole in our roof. When it does decide to act, it’s usually too heavy-handed or impractical. The result usually fails to achieve its desired ends, creating more red tape for the financial services industry without actually helping investors.
What cases are you working on right now?
As interest rates remain at historic lows, retirees are looking to non-conventional investment products to generate income. This, combined with fears over inflation, is pushing retirees into riskier and risker investments. We continue to be very busy with non-traded investment cases and other investments that “promise” returns of 7% or higher.
We also continue to see many clients that were victims of Ponzi schemes. I’ve represented dozens of clients who were victimized by the GPB Capital Ponzi scheme. Thus far I have a 100% success rate with those cases. In addition to the GPB Ponzi scheme, we are also working with victims of the Horizon Ponzi scheme that was allegedly orchestrated through Oppenheimer representatives in Georgia and eastern Tennessee.
What challenges do you see in 2022?
COVID continues to create significant problems for us. I have a national practice, which previously required me to fly all over the country. My last trip was mediation in Pheonix, Arizona in February 2020. Since that time, everything I have done has been over zoom video conferencing. In fact, earlier this year, in January 2021, I won an arbitration before FINRA that was conducted entirely over zoom. It was originally scheduled to be held in Los Angeles, California. I don’t see zoom as a long-term solution to arbitrations and trials. Even though we won over $685,000 for that client, I still would have preferred a live hearing in LA.
Hiring will also continue to be a major challenge in 2022. My practice is busier than it has ever been, but the COVID pandemic has made it difficult to attract top talent. My focus for 2022 is going to be to recruit more attorneys. We need to go out and recruit talented new attorneys.
You recently separated with Jonathan Kurta after ten years in practice, why?
It’s complicated but extremely amicable. Jon and I remain amazing friends and continue to speak almost daily. We continue to have a common passion for investor advocacy, good food, and bad jokes. When we do get together, we don’t really talk about work and focus more on things like debating who has the best bagels on Long Island. Could a reconciliation be in the works? Maybe, but not now. Jon and I are both incredibly busy with our new law firms and wish each other nothing but the best.