The Fallout From Madoff’s Fraud Includes an Ironic Twist for Investorsby
Courts say investing from offshore keeps the trustee away
Rulings make it easier for ‘people to benefit from cheating’
The Fallout From Madoff’s Fraud Includes an Ironic Twist for Investors – Bloomberg
The legal fallout from Bernard Madoff’s epic fraud includes an ironic twist: a road map for investors wanting to hold on to profits that seem too good to be true.
In the eight years since Madoff’s arrest, a series of court decisions have favored investors who profited from the scam, damping the hopes of trustee Irving Picard to return more to Madoff’s victims who lost $17.5 billion in principal, legal experts say. At the core of the disputes is how far Picard can go to make the Ponzi scheme’s investors whole.
“The rulings all lower the risk associated with investing in something that might be a Ponzi scheme,” said Anthony Casey, a University of Chicago law school professor. “Some of these were inevitable conclusions of law. The courts weren’t necessarily being lenient to the big institutions. It just happens to help the wealthier investors.”
Picard and his team of New York-based lawyers have recovered about 65 cents on the dollar — more than anticipated after the collapse of the biggest Ponzi scheme in U.S. history. And while the trustee’s recovery efforts continue on multiple fronts, including suits against some of Madoff’s biggest investors, the rulings took billions of dollars off the table and make a 100 percent return seem impossible.