Madoff Ponzi Scheme and the Sub-Prime Mortgage Securitization Debacle: The State Common Law Aspects

more+
less-

Charles E. Rounds, Jr., State Common Law Aspects of the Global Unwindings of the Madoff Ponzi Scheme and the Sub-Prime Mortgage Securitization Debacle, 27 Wisconsin Int’l Law J. (2009). When all is said and done, Bernard Madoff violated a fundamental principle of agency law, namely that an agent with discretion who engages in unauthorized self dealing with the principal’s property breaches his or her fiduciary duty to the principal and incurs liability as a result. The principal is generally entitled to equitable relief. It is as simple as that. As to the sub-prime mortgage securitization debacle, it was the very essence of the Anglo-American trust, itself an invention of equity, which facilitated the massive global mispricing of beneficial interests in pools of sub-prime mortgages, namely that the holder of the legal title to entrusted property need not also possess the beneficial interest in it. The rest is history. That Agency, Trusts, and Equity are no longer required courses in most American law schools, and have not been for some time now, is regrettable. Curriculum reform is fine, but not if critical doctrine ends up on the cutting room floor.

LOADING PDF: If there are any problems, click here to download the file.

Published In: Bankruptcy Updates, Business Organization Updates, Finance & Banking Updates, International Trade Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Charles E. Rounds, Jr., Suffolk University Law School | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

CONNECT

Charles E. Rounds, Jr.
Suffolk University Law School

Professor of Law, Suffolk University Law School. Tenure granted: 1990. Author: Loring and... View Profile »


Follow Suffolk University Law School:

Reporters on Deadline