The owners of the New York Mets baseball team will ask a Manhattan judge to decide remaining claims of $386 million in a suit from Irving Picard, the trustee for Bernard Madoff’s defunct firm. U.S. District Judge Jed Rakoff threw out most of Picard’s $1 billion claims against the team owners and this month refused to let the trustee appeal his ruling before a March jury trial. The Mets owners, Fred Wilpon and Saul Katz, will ask Rakoff next month for judgment on all remaining counts of Picard’s complaint, they said in a Jan. 20 court filing. Picard said separately he wants a ruling before trial on one remaining count of his lawsuit. See Bloomberg Businessweek report [...]
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HSBC Holdings Plc, Europe’s largest lender, withdrew a settlement offer with investors in a feeder fund that lost money in Bernard Madoff’s Ponzi scheme after a U.S. court dismissed the case. The individual investors in 2009 sued Thema International Fund Plc and 27 other defendants, including HSBC, Thema’s custodian bank, alleging the bank should have known of Madoff’s fraud. HSBC asked the court to dismiss the case in October, saying it should be heard in Ireland and Luxembourg. The court today found Ireland was a “more appropriate forum,” the London-based lender said in a statement today. More in Bloomberg Businessweek [...] Securities regulators are due in court on Tuesday to argue that a brokerage industry-backed protection fund should let thousands of victims of Allen Stanford’s alleged Ponzi scheme file claims for compensation. The Securities Investor Protection Corp, which has handled liquidation proceedings for Bernard Madoff’s Ponzi scheme and the MF Global failure, has said the 40-year-old Securities Investor Protection law does not apply in the Stanford case. Read Reuters report [...] Third Anniversary Update, Part II: Legal Landscape MESSAGE FROM THE PRESIDENT: The Courts have yielded mixed results at best in 2011 for Madoff victims. This is the second of a Three Part Anniversary Update. If you haven’t already done so, I encourage you to read Part One – which focused on legislative action, while next week, Part Three will address The Media and Where We Stand. Ties between government and self-regulatory organizations are likely to get tighter as they rely more on each other, said Richard Ketchum, chairman and chief executive of the Financial Industry Regulatory Authority (FINRA), in a recent interview. “Collaboration between SROs (self-regulatory organizations) and government agencies is going to be even more important,” especially as the responsibilities of both continue to grow, Ketchum told Reuters. Read more on Reuters [...] No one calls him Sir Allen Stanford anymore. He is inmate number 35017-183. On Monday, the Texas financier heads to court in Houston to battle charges that he operated a $7 billion Ponzi scheme from Stanford International Bank Ltd, his offshore bank on the Caribbean island of Antigua. By all accounts, his was a life of luxury, filled with private jets, yachts, mansions and the sport of cricket. Deemed a flight risk in June 2009 by a federal judge, the 6-foot billionaire has been in jail, sporting prison-issue green and orange jumpsuits and shackles instead of the dark, tailor-made suits he once ordered in bulk. More on Reuters here. [...] Capital markets can’t work efficiently unless investors trust the process. They’ll put their hard-earned money under the mattress instead. With that in mind, investor trust in financial markets rises and falls in direct proportion to the levels of transparency and accountability found in those markets. Consequently, it’s not surprising that both attributes are held up as key to the core mission of the Securities and Exchange Commission, the regulatory agency that oversees U.S. securities markets. However, a spate of recent insider trading cases and several well-publicized instances in which major investment banks have been accused of defrauding their clients for their own gain have raised concerns for transparency and accountability in U.S. securities markets. See Fox Business News report [...] From a courtroom in Manhattan, not far from the epicenter of the nation’s financial crisis, a longtime federal judge is becoming a hero to many and a nightmare to some for demanding greater accountability in cases of alleged Wall Street fraud. Jed S. Rakoff is driving regulators nuts by refusing to rubber-stamp the kind of deals that have long defined Securities and Exchange Commission justice — boilerplate settlements in which companies use shareholders’ money to pay fines while they neither admit nor deny doing anything wrong. The latest example called for Citigroup to pay $285 million for alleged misconduct during the mortgage meltdown. More in the Washington Post [...] With spring training just weeks away, nobody’s working harder to prepare for the New York Mets’ future than their lawyers. A March trial may decide how much the team owners’ disastrous investment in the fraudulent business of imprisoned financier Bernard Madoff will cost the club. “It’s going to garner tons of attention and comes at a horrible time for the Mets. It’s not a great way to start the season,” said Neal H. Levin, who heads the fraud team at the Chicago law firm Freeborn & Peters and is not involved in the case. Read Associated Press report here. Wall Street, it often seems, is exempt from the laws of economics. Most active money managers produce worse returns than an index, such as the Standard & Poor’s 500. But making enough money to look respectable to clients has been relatively easy as long as falling interest rates boosted the value of most asset classes. What’s more, new competitors constantly enter the business, yet rarely discount fees to gain market share. Instead, funds rely on investors to chase the latest high-performing manager, like gamblers who ignore their losses while seeking a hot slot machine. This has given the business a pricing umbrella that shelters it from competition. More in Investment News [...] |
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