NEW YORK The citys tabloids had a field day Thursday over a lawsuit involving U.S. Trust Corp., just as the tony private banking arm of Charles Schwab Corp. in San Francisco was recovering from a dose of bad publicity the previous week about compliance issues.
Both the Daily News and the New York Post ran stories citing recent court papers claiming that U.S. Trust had settled a lawsuit filed in the late 1990s that had accused it of failing to fulfill its role as a court-appointed guardian for Renate Hofmann, the widow of the artist Hans Hofmann.
Ms. Hofmann died alone and in squalor, the tabloids maintain, while her guardian collected millions in fees. Both newspapers said that U.S. Trust and the co-defendant, the lawyer Richard Covey, had settled for millions of dollars and sought to get the court papers sealed, but that a recent ruling upheld them as public documents.
Last week U.S. Trust was ordered to pay $10 million to settle allegations that a trading unit improperly purchased securities on the banks own account and that its money-laundering controls were deficient.
In a statement, U.S. Trust said that it had been responsible for monitoring Ms. Hofmanns tangible property and financial assets. We discharged our responsibilities in a thorough and professional manner, the statement said. According to U.S. Trust, Mr. Covey was responsible, alone, as committee for Ms. Hofmanns person with sole responsibility for overseeing her personal well-being.
American Banker was unable to reach Mr. Covey for comment by press time.