46.8 F
New York
Thursday, March 28, 2024

Madoff’s Trustee’s Struggles Continue in Court

Related Articles

-Advertisement-

Must read

Bernie Madoff is serving a 150-year sentence in a North Carolina prison. His trustee, Irving Picard, is struggling to recover money to reimburse those who lost in Madoff’s Ponzi scheme.
Bernie Madoff is serving a 150-year sentence in a North Carolina prison. His trustee, Irving Picard, is struggling to recover money to reimburse those who lost in Madoff’s Ponzi scheme.
Irving Picard swings and misses yet again.

The court-appointed trustee working to recover funds for the victims of Bernie Madoff’s Ponzi scheme experienced another setback last week when an appeals court prevented him from suing major financial institutions for approximately $30 billion, according to the Wall Street Journal.

Picard has encountered trouble in his efforts to recover cash for victims as of late, partly because other investors who indirectly invested with Madoff have arranged for separate settlements to recover their losses, which Picard says has damaged his efforts to recover cash for those who directly invested with the Ponzi schemer, the Journal explained.

The U.S. Court of Appeals for the Second Circuit in New York ruled in consonance in with an earlier ruling claiming Picard did not have legal standing to take back money from JP Morgan Chase, UBS AG, HSBC Holdings, PLC, and Unicredit Bank Austria AG. Picard’s arguments Thursday “all [missed] the mark,” the three judges unanimously agreed, according to the aforementioned report.

“[A] bankruptcy trustee has no standing generally to sue third parties on behalf of the estate’s creditors, but may only assert claims held by the bankrupt corporation itself,” the court ruled Thursday, the Journal further reported.

The court also cited New York law that “bars a trustee from suing to recover for a wrong that he himself essentially took part in,” according to the Associated Press.

Picard’s efforts against the relevant banks are still alive in bankruptcy court, however, the Journal further reported. He also has other options to push for retributive payments: He can ask for a larger appeals court panel to treat the case or bring the case to the Supreme Court, the report added.

Picard claimed in 2010 that the four relevant banks were negligent and ignored signs of the Ponzi scheme.

In terms of retaining all the money lost in the fraud, Picard still has ways to go. He has filed $100 billion in lawsuits but has only recovered $9.3 billion. Picard estimates that $17.5 billion was, “in principal,” lost in the Ponzi scheme, according to the Journal.

On Thursday, Picard launched heavy claims against the aforementioned banks: He said J.P Morgan was “at the very center” of the Ponzi scheme and “thoroughly complicit in it;” that HSBC “engineered a labyrinth of hedge funds, management companies and service providers” that “provided different modes for directing money to Madoff while avoiding scrutiny and maximizing fees;” and that UBS “[legitimized] and [attracted] money to Madoff’s fraud,” the Journal reported.

As expected, the banks responded favorably to the decision, affirming their innocence. UBS said it was “pleased with the court’s decision;” Unicredit stated similarly that “We are very pleased at the Second Circuit’s well-reasoned opinion;” and J.P. Morgan considered the decision “very well reasoned.”

“As we have previously stated, we believe the trustee’s claim that J.P. Morgan was complicit in Madoff’s fraud is completely without merit,” J.P. Morgan added in its comment, the Journal reported.

As if responding to the anger that victims of the Ponzi scheme may have felt after learning of Thursday’s court decision, Picard announced Friday, separately, that Bernie Madoff’s art would be auctioned off to recover cash for the victims of his crimes. Madoff’s art included works by Warhol and Matisse, according to Bloomberg, and is insured for more than $575,000.

Bernie Madoff is currently serving a 150-year prison sentence, according to the Journal.

balance of natureDonate

Latest article

- Advertisement -