What Is the Stock Market Lawsuit Against Edward Lake?

The lawsuits against Edward Lake are two civil suits filed in October 2025 in New York state court by Florida investors Sylvia Benito and her husband Rick Solit, who accuse the New York attorney and his firm of running what one complaint calls a scheme “more akin to a Ponzi scheme than a legitimate litigation finance program” with more than $15 million that was supposed to fund mass tort cases and federal tax credit claims.¹² The allegations remain unproven; no court has ruled on the merits.

Who Edward Lake Is

Edward Lake is a New York plaintiff-side attorney who co-founded Gacovino and Lake in 1993 before establishing the Lake Law Firm.³ His firm handles mass tort litigation involving products such as Zantac, Gardasil, talcum powder, Roundup, paraquat, toxic baby food, infant formula, and hernia mesh.¹

How the Investment Arrangement Worked

In 2020, Benito and an associate named Lee Melchionni formed an investment venture called Justice Partners to raise outside capital and channel it to the Lake Law Firm to finance mass tort cases. Justice Partners ultimately raised $11.25 million for that purpose. In total, according to the lawsuits, the firm received more than $15 million from Benito, Solit, and other investors.¹⁴

The arrangement is a form of third-party litigation funding, in which outside investors put up money in exchange for a share of eventual settlements or judgments.⁵

What Sylvia Benito Alleges

Benito filed her complaint on October 20, 2025 in the Supreme Court of New York, Suffolk County (Index No. 628021/2025), through attorney William A. Brewer III.⁴⁶ Her four causes of action are breach of contract, fraudulent inducement, negligent misrepresentation, and constructive trust. The complaint alleges the firm failed to deliver the mass tort case portfolios it had promised and that Lake used money from newer investors to cover earlier obligations instead of putting it into cases.¹

Two categories of personal harm are laid out in the filing. Benito says she made personal loans to Lake totaling $1,050,000 between January 2024 and March 2025, none of which were repaid.⁴ Separately, in April 2022 she invested $1.5 million through the firm to acquire Employee Retention Tax Credit claims, the federal credits created under the CARES Act to help businesses retain workers during the pandemic. According to the complaint, Lake bought the ERC claims for himself and recharacterized her investment as a personal loan, cutting her out of any returns.⁶

Benito seeks at least $2.55 million in compensatory and consequential damages, a constructive trust over Lake’s assets of at least $8.55 million, punitive damages for what the complaint calls “felony-level misconduct,” and disgorgement of profits from the disputed investments.⁴

What Rick Solit Alleges

Solit filed his own suit two days later, on October 22, 2025, in New York Supreme Court (Case No. 628419/2025). He alleges he put nearly $5.3 million into mass tort cases and tax credit claims through the firm and seeks $6.2 million in damages, plus any profits from cases he says belong to him.²

His complaint spells out how far the firm fell short of the case volume it had promised:

Hernia mesh: 15 cases delivered out of 113 promised.
3M matters: 40 out of 100 promised.
Roundup: 8 out of 50 promised.
Talcum powder: zero cases delivered.
Employee Retention Credit: 2,655 out of 8,000 promised.

Solit’s filing describes the operation as “more akin to a Ponzi scheme than a legitimate litigation finance program” and says Lake “exploited” his confidence and misused funds.²

Where the Cases Stand

As of mid-2026, no rulings, motions to dismiss, or settlements have been reported in either case.⁶ A related federal case, Solit et al v. Lake et al (Case No. 2:2025cv06683) in the U.S. District Court for the Eastern District of New York, was closed in December 2025 without any substantive ruling; court records indicate it had been incorrectly opened in district court rather than bankruptcy court.⁷ The Suffolk County state proceedings appear to be the active venue for both disputes.

Lake has not filed a public response to either complaint that appears in available court records. Every allegation described above is a plaintiff’s claim, and no court has made any findings.

Does New York’s New Litigation Funding Law Apply

On December 19, 2025, Governor Kathy Hochul signed the Consumer Litigation Funding Act (S1104A, Chapter 645), which takes effect in mid-2026 and adds a new article to New York’s General Business Law regulating third-party litigation funders.⁸ The statute is unlikely to govern the arrangement at issue in the Lake suits: the investments predate the law, and the law targets consumer-facing funding agreements with individual plaintiffs rather than attorney-to-investor relationships of the kind Benito and Solit describe.

1
New York Law Journal. Effectively Running a Ponzi Scheme: NY-Based Lake Law Firm Sued Over Mass Tort Financing
2
Bloomberg Law. 3M, J&J Mass Tort Funder Sues NY Law Firm for Investment Debacle
3
MTMP. Edward Lake
4
ALM/New York Law Journal. Ponzi NY Lawyer Suit
5
Institute for Legal Reform. What You Need to Know About Third-Party Litigation Funding
6
Brewer Attorneys. Brewer Client Sylvia Benito Files Suit Alleging Fraud and Contract Breaches by New York Attorney
7
Justia Dockets. Solit et al v. Lake et al
8
New York State Senate. S1104A – Consumer Litigation Funding Act