Litigation Alert -- April 2012


In This Issue:

The Face That Launched A Thousand Lawsuits - Madoff's Legacy; The Bark of the Claw Back is Worse than its Bite; and The Latest Battle: to Withdraw or not to Withdraw the Reference.

Excerpt from The Face That Launched A Thousand Lawsuits - Madoff's Legacy

We are all familiar with Bernie Madoff, the once Wall Street mavin turned scoundrel who siphoned billions of dollars from innocent – and some, maybe not so innocent – investors, in what is believed to be the largest Ponzi scheme of all time. Although it has been nearly two and a half years since Madoff's arrest, thousands of lawsuits arising from his Ponzi scheme are still making their way through the courts, many of which are venued in New York's federal court – the Southern District. This firm has been on the front lines of the many Madoff battles being waged in the courts. We (i) instituted the first class action against Madoff within days of his arrest; (ii) filed numerous SIPA claims on behalf of bilked investors; (iii) commenced lawsuits against hedge fund managers who funneled funds to Madoff for investors without direct access, despite numerous red flags suggesting that those hedge fund managers turned a blind eye to Madoff's fraud; and (iv) are defending so-called "net winners" against "claw backs" brought by Irving Picard, the trustee of Madoff's bankruptcy estate. The legal battles with which this firm has been involved point to one common denominator: the courts have prevented the various Madoff related cases from overburdening the system designed to remedy Madoff's fraud. Most recently, issues surrounding Picard's claw backs have pushed to the forefront.

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