Bankruptcy Advisory: Madoff Trustee Cannot Sue Firms That Ignored Evidence of Fraud
8/15/2011
In the aftermath of the largest Ponzi scheme ever to hit investors, Bernie Madoff’s victims are still reeling from the tremendous losses they have suffered, and are looking for any possible avenue to recover even a fraction of their investments. One potential avenue of such recovery, “feeder funds”—firms that sent investors’ funds to Madoff Securities and that failed to detect the fraud—may have been closed off recently when the US District Court for the Southern District of New York held that the Madoff trustee, Irving H. Picard, has no standing to pursue certain common law claims against the funds.
