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Category : Madoff

Fund Managers Hit With Suit Over $32M Madoff Loss

July 20th, 2010

Law360 covers a new development in the Madoff saga, which rocked Wall Street over a year ago.

Shareholders in a hedge fund that lost $32 million as a result of Bernard L. Madoff’s notorious Ponzi scheme have filed a derivative lawsuit on behalf of the fund against its investment manager and executives, saying they should have known investing with Madoff was risky.

The plaintiffs, employee benefit funds for New Jersey carpenters, filed their suit Wednesday in the New York County Supreme Court against Meridian Diversified Fund Management LLC and 10 executives. The plaintiffs are shareholders in Meridian Diversified ERISA Fund Ltd.

The shareholders are being represented by Milberg LLP, Seeger Weiss LLP and Kroll Heineman LLC.

“All my life savings, it all went into Madoff and it is all gone.”

March 10th, 2010

“Madoff Judge Endorses Trustee’s Rule on Losses,” from the New York Times:

The ruling is a setback for investors like Adele Fox of Tamarac, Fla., an 87-year-old retired school secretary who was widowed in 1986. Mrs. Fox withdrew more than her original capital for living expenses, but still had nearly $3 million on her account statement when the fraud was discovered.

Under Judge Lifland’s ruling, she is not eligible for cash from the Securities Investors Protection Corporation, the industry-financed organization that provides limited protection for customers of failed Wall Street firms.

“My health has been a mess,” Mrs. Fox said on Monday. “I can manage, more or less, but if I have to go into a facility, what would I do? All my life savings, it all went into Madoff and it is all gone.”

SEC Inspector General Attributes Failure to Uncover Madoff Scheme to Agency Incompetence

September 28th, 2009

In a nearly 500-page report, the Securities and Exchange Commission Inspector General H. David Kotz issued detailed findings on how the SEC failed to uncover Bernie Madoff’s colossal Ponzi scheme.  Kotz noted that the SEC had received six credible warnings about Madoff’s far-reaching fraud over 16 years, but failed each time to act and expose the scheme.  Disturbingly, Kotz further observed that despite three examinations and two investigations, “a thorough and competent investigation or examination was never performed.”

For the many thousands of Madoff victims, the report’s findings of incompetence offered little solace.  Indeed, it only confirmed in their minds what they already believed – that their reliance on the SEC to monitor and police broker-dealers was misplaced.  What was surprising, however, was the extent to which the Inspector General took to task the agency that he was tasked to examine.

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