Just months before a scheduled 10-day federal civil jury trial, attorneys for once-prominent investment advisor Walter Morales have withdrawn from the case, citing “irreconcilable differences.”
In a recent memo to Magistrate Judge Carol Whitehurst, Hammond attorney Gary Gambel, New Orleans attorney Jennifer Willis and Livingston attorney Rebecca Davis Lee note only that their decision involves “reasons which it would be inappropriate to publicly state but which render ongoing representation impractical and unworkable.”
Whitehurst granted their motion last week. The move comes a little over three years after Taylor Porter attorneys Frederick Tulley, John Milazzo Jr. and Ryan French were replaced by the new legal team.
More than 13 years ago, local investors sued Walter Morales and his firm, Commonwealth Advisors, alleging that they were misled about how risky their investments were and how their money was handled, which Morales has denied.
While Morales settled a similar suit with the U.S. Securities and Exchange Commission in 2018—admitting no wrongdoing but agreeing to pay a $130,000 fine and not associate with any investment adviser for at least five years—the investors’ case continues to this day.
In October, the parties had indicated that all plaintiffs except one have settled in principle, conditioned on funding by the end of the year, according to a federal court filing. A settlement with the remaining plaintiff was said to be possible with further negotiation.
Now a 10-day jury trial before Judge John deGravelles is set to begin on Sept. 9.
The Registrar of Voters Employee Retirement System, Firefighters Retirement System and several investment funds remain as plaintiffs; Walter Morales, Commonwealth Advisors and other entities as defendants.
Morales was a well-known and highly respected advisor in Baton Rouge with a reputation for delivering better-than-average returns. Following the 2008 financial crash, he was accused of misleading his clients about where he invested their money and using fraudulent means to hide losses.
Morales said he did not engage in fraud and only tried to help his clients after the mortgage-backed securities market collapsed. The SEC did not accuse him of stealing investors’ money and he did not face criminal charges.
At deadline, Morales had not responded to an email sent via his website.