June 21, 2013 12:07 am

Madoff trustee suffers setback

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

Bernard Madoff’s bankruptcy trustee was blocked yesterday from an attempt to claim damages from a range of banks including JPMorgan Chase and HSBC, a setback in his attempt to claw back money for victims of the Ponzi scheme.

The US Court of Appeals for the Second Circuit in New York ruled that Irving Picard, the trustee for the liquidation of Bernard L. Madoff Investment Securities LLC, did not have standing in the case.

The decision leaves room for two potential appeals, back to the appeals court in New York or to the US Supreme Court. But the banks trumpeted what they believe was a decisive win. “It’s a very well reasoned decision and affirms our view that the trustee’s common law claims lacked merit,” said JPMorgan.

A spokeswoman for Mr Picard said the trustee would fight on, continuing “to vigorously pursue more than $4bn at issue in bankruptcy claims against these financial institution defendants”. The bankruptcy claims are separate to the claims for damages.

The decision upheld earlier rulings which dismissed about $19bn of claims against JPMorgan, $8.6bn against defendants including HSBC and UniCredit, and $2bn against UBS and other defendants.

Madoff is serving 150 years in prison for his fraud, which spanned 20 years and defrauded customers of about $20bn.

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments
SHARE THIS QUOTE