There is was considerable testimony at the plan of reorganization with the trustee expert Grant Newton saying yes and Freddie Reiss of FTI saying no. In the end Riblet sided with Newton and it is becoming the law of the case, unless the appeal on stockbroker changes anything.

While Slatkin was solvent or close to solvent for a short time, solvency is not in the definition of Ponzi for the 9th circuit.

There is evidence Reed Slatkin did not initially operate a pure Ponzi Scheme. Chief among the facts is the fact he had assets of 170 million in Earthlink alone with at least 30-50 million additional assets. In fact the trustee argues that it is by definition insolvent from day one-link. The best evidence to date that it was a Ponzi comes from the Trustee's Official Forensic Analysis that was presented Dec 2001 and states conclusively numerous times this was a Ponzi Scheme-report. It is also the Trustee's position that Slatkin was insolvent from day one. He has not been including Slatkin's assets such as Earthlink in the equation of total assets. Omitting assets invested from 1986 on skews the evaluation of whether Slatkin was insolvent, and whether investment income was available to pay investor returns, instead of simply using other investor' money.

• Reed paid millions in estimated tax to IRS-in 2001-
• Reed bought and sold millions of shares of stock each year.


• He made over 150 million in Earthlink and had substantial gains in Instant Video,Netegrity, Vixel, Chantal.
• He had multiple real estate partnerships, real estate holding and start-up investments.
• He had a sophisticated lucrative trading partnership with George Elvin worth from 10-15 million to Reed-letter.
• His contract did not guarantee a specific rate of return. It warned about loss of some or "all" of your money.