Tom Burroughes
Group Editor
30 May 2012
Daily News Analysis
Investors hit by Ponzi fraudster Bernard Madoff could obtain almost $77 million if newly-filed clawback litigation succeeds, according to the Wall Street Journal.
Trustee Irving Picard, who is responsible for recovering stolen funds for Madoff's investors, has filed two lawsuits seeking the return of $70.1 million from Northern Trust Corp and $6.7 million from Crédit Agricole Private Banking Miami, according to papers filed with the US Bankruptcy Court in Manhattan.
Madoff's multi-billion fraud, exposed amid the financial crisis that blew up almost four years ago, highlighted the need for tight due diligence on investments. Among his victims were wealth management firms and their clients. Since Madoff's conviction and jail sentence, the affair has spawned a variety of lawsuits from people and institutions trying to claw back money.
The WSJ report said the lawsuits do not accuse the wealth management firms of wrongdoing; instead, they seek to claw back funds that the defendants were told represented returns on their investments in the so-called feeder funds that funneled investors' money to Madoff's firm. But the funds were actually other investors' money, the hallmark of a Ponzi scheme.
