Monday, July 26, 2010

Clawback Lawsuits For Madoff Victims Who Were "Net Winners"

Trying to clean up after a fraud is a messy affair.  Trying to clean up after the world's biggest ponzi scheme collapses is just downright nasty.  The WSJ reports that Madoff trustee Irving Picard is preparing to sue many of the Madoff victims who ended up in the black when all was said and done:

In an interview, Irving Picard said he could wind up suing about half the estimated 2,000 individual investors he has called "net winners" from their dealings with Mr. Madoff. Such investors withdrew more from Mr. Madoff's firm than the amount of principal they invested.  
"The people who made money, who got more, have made money at the expense of the people who didn't," said Mr. Picard, who has the power under federal bankruptcy provisions to pursue money withdrawn from Bernard L. Madoff Investment Securities LLC before it collapsed in December 2008 and redistribute the funds fairly among victims.

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