$3.9-Million Settlement OKd in J. David Lawsuit

A Superior Court judge on Thursday approved a $3.9-million settlement of a lawsuit between 334 former J. David & Co. investors and three professional firms once connected to the defunct La Jolla investment firm.

Presiding Judge Donald W. Smith announced his ruling over the strong objections of attorneys representing Rogers & Wells, J. David’s former law firm, which is not included in the settlement.

Rogers & Wells remains the target of several lawsuits brought by former investors seeking more than $100 million in damages.

Brad Phillips, arguing for Rogers & Wells, objected to the agreement’s caveat that the settlement payments would be decreased by judgments that investors may later win against other third parties, most notably Rogers & Wells.

Two Firms Included

Included in the settlement are Prudential-Bache Securities, which once employed J. David & Co. founder J. David (Jerry) Dominelli, and Rollins, Burdick & Hunter, an insurance firm in Northern California that bonded J. David & Co. against fraud by outsiders and by employees.

Investors had alleged that Prudential-Bache should have publicly rebuked Dominelli’s widely circulated, but false, claims that his trading record was profitable during his tenure at the brokerage firm.

In addition, some investors charged that they had based their decision to invest in J. David & Co. on Rollins, Burdick & Hunter’s investigation of the firm.

About 1,500 investors lost $200 million by investing in J. David & Co. over a five-year period.