Adds additional detail in paragraph 4, comment in paragraph 6

By Mike Scarcella

WASHINGTON, May 21 (Reuters) - A U.S. jury said Mississippi-based Baker Donelson failed to supervise a lawyer and a lobbyist at the national law firm who later pleaded guilty to criminal charges tied to a multimillion-dollar investor fraud scheme.

But the jury in federal court in Jackson, Mississippi, on Wednesday agreed with Baker Donelson that the former employees' conduct fell outside the scope of their work at the 700-lawyer firm.

The verdict came on the second day of deliberations after a trial that began in late April. The case was brought by court‑appointed receiver Alysson Mills, who is overseeing efforts to repay victims of an ​alleged fraud involving a purported broker at a timber company.

The panel found the law firm liable for $1.4 million in damages for negligent supervision of its former Jackson‑office partner Jon Seawright and senior ‌policy ⁠adviser Brent Alexander. The firm is not obligated to pay the amount, however, because the panel also found that Mills in her other efforts to recover losses from the investment scheme failed to mitigate $10 million in damages suffered by victims.

Baker Donelson in a statement said the verdict showed the firm had no knowledge of the alleged fraud scheme and was not responsible for it. The firm said it was disappointed the jury found the firm responsible for two claims it said were unfounded.

"We firmly believe the facts and the law have convincingly displayed and supported our many defenses since the outset," the firm said.

A lead attorney for Mills, Brent Barriere, in a statement said “after eight years of denial by Baker Donelson that it played any role in the Ponzi scheme, we are proud of this validation and appreciate the jury's service.”

The lawsuit against Baker Donelson stemmed from its former employees' work launching a fund that pooled investor money for Lamar Adams and his company Madison Timber.

Adams, the scheme's alleged leader, was sentenced in 2019 to more than 19 years in prison. Prosecutors said he fraudulently obtained tens of millions of dollars from hundreds of investors.

Seawright, ​a transactional partner ⁠and former board member at Baker Donelson, and Alexander pleaded guilty to conspiracy to commit wire fraud. Seawright was sentenced to 12 months in prison ​in 2023 and ​Alexander received ⁠five years of probation.

The law firm argued at trial that Alexander and Seawright were not acting within the scope of their employment or in furtherance of Baker Donelson’s interests.

The firm also denied that its alleged failure to enforce policies concerning firm resources and client solicitation contributed to Alexander and Seawright's actions.

The case is Alysson Mills v. Baker Donelson, U.S. District Court for the Southern District of Mississippi, No. 3:18-cv-866-CWR-BWR.

For Mills: Brent Barriere of Fishman Haygood; and Lilli ​Evans Bass of Brown, Bass & Jeter

For Baker Donelson: Craig Singer of Williams & Connolly, and James Crongeyer of Watkins & Eager

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