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Hearing in Mets Case Is Possibly a Preview

By March 5, the ground rules of the jury trial against the owners of the Mets will be known. The federal judge hearing the lawsuit could indeed decide that there will no trial at all. By not ruling on motions for summary judgment by both sides on Thursday, Federal District Court Judge Jed S. Rakoff let the suspense build about the case, scheduled to go to trial March 19. He can leave it as it is, with the trustee for Bernard L. Madoff’s victims suing the Mets’ owners Fred Wilpon and Saul Katz to recover as much as $386 million. Rakoff can grant the wishes of owners and dismiss the case. Read New York Times report [...]

Only drama left besides verdict is whether Stanford will talk

The R. Allen Stanford fraud trial appears to be winding down, and the big question is whether the Texas tycoon will take the stand today, Monday or at all. The defense team will continue this morning with their paid expert accountant witness, Morris Hollander. Once his testimony is over, another paid witness is expected to come on, and then possibly Stanford himself. Stanford doesn’t have to take the stand. And the defense team does not have to tell U.S. District Judge David Hittner or the prosecution team that he is testifying until the last possible moment.
More on Chron.com [...]

Independent BDs Back SIPC Over Stanford Suit

Fallout from the Allen Stanford case is still growing. In the latest clash over whether shareholders should be protected from losses á la Bernard Madoff, the National Association of Independent Broker-Dealers has sent a letter to Mary Schapiro, chairman of the SEC, that says the Securities Investor Protection Corp. should not have to cover those losses. Stanford was charged in 2009 in a Ponzi scheme that defrauded investors of more than $7.2 billion via “safe” offshore certificates of deposit. As previously reported by AdvisorOne.com in early July, “improbable, if not impossible” guaranteed rates of return were promised on the CDs issued by the Antigua-based Stanford International Bank. Read Advisor One report [...]

SEC’s Schapiro Says More Civil Actions Coming in Crisis Cases

The U.S. Securities and Exchange Commission’s enforcement division isn’t finished pursuing cases connected to the 2008 financial crisis, said SEC Chairman Mary Schapiro. “There are more actions to come,” Schapiro said today at a Washington securities-law conference, citing an enforcement record that has filed actions against Goldman Sachs Group Inc. (GS), Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM), and against executives at Bank of America Corp.’s Countrywide unit, Fannie Mae and Freddie Mac. Read Bloomberg report here. [...]

Regulators Propose Exemptions for Large Swap Trades

U.S. regulators on Thursday proposed allowing traders to delay disclosing information about certain large deals in the swaps derivatives market. The Commodity Futures Trading Commission voted 3-2 on a proposal to exempt swap “block trades” of a certain size from new requirements that mandate immediate disclosure of swap transactions. Swaps are complex derivative contracts that allow traders to “swap” fluctuations in interest rates, exchange rates, the likelihood of default or other financial instruments. More in the Wall Street Journal [...]

Judge Defers Ruling on Mets’ Madoff Case

A federal judge in Manhattan said Thursday that he would rule by March 5 on motions that could alter the face of the lawsuit against the owners of the Mets filed by the trustee for Bernard L. Madoff’s victims. Jed S. Rakoff, a United State District Court judge, heard more than two hours of oral arguments by both sides before deferring his decision. His only ruling was to toss out the trustee’s two expert witnesses and the one offered by the Mets’ owners, John Maine, who has the same name as a former pitcher for the team. A jury trial is scheduled to begin on March 19.
Read New York Times report [...]

NY judge to decide by March 5 on Mets-Madoff trial

A judge said Thursday he’ll decide by March 5 if a trial is necessary to decide if the owners of the New York Mets were willfully blind to the multibillion-dollar fraud by financier Bernard Madoff.U.S. District Judge Jed Rakoff heard arguments from lawyers for more than two hours, questioning both sides at length. Afterward, he announced he’ll take a few more days to decide whether a March 19 trial is necessary to decide the validity of claims by a trustee recovering money for cheated investors. The court-appointed trustee, Irving Picard, sued the Mets owners, saying they had to know Madoff was acting illegally. Rakoff has already limited what the team’s owners might have to pay to other Madoff investors to $386 million. The trustee had sought $1 billion. Read more on CBS Moneywatch [...]

SEC head signs off on STOCK Act

Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro gave her blessing to legislation explicitly banning insider trading by lawmakers that has passed both chambers of Congress. As lawmakers pushed to pass the bill making clear that they could not personally profit using private information obtained in the course of their work, SEC officials had previously cautioned that any new laws should tread lightly on existing authority. More in The Hill [...]

Regulators Move to Prevent Another MF Global

Federal regulators are narrowing a list of possible new safeguards for customers at futures firms, a response to the collapse of MF Global and the disappearance of more than $1 billion in client cash. The Commodity Futures Trading Commission will hold a public roundtable next week to discuss policy changes, including a plan that would allow customers to trade through futures brokerage firms without keeping their excess cash there, according to a copy of the agenda provided to The New York Times. More in the New York Times [...]

How Many Lawyers Does It Take To Solve Madoff? Can You Say Over 300?

You can observe a lot by watching, as the great Yogi Berra has said. So, let’s keep looking at the request for $47.9 million in additional legal fees that has just been filed by Madoff trustee Irving Picard and his law firm, Baker & Hostetler LLP. It makes us here at the Financial Fraud Law Blog and the Financial Fraud Law Report recognize the incredible scope of this financial fraud. One of the things that strikes us is the sheer number of lawyers at Baker who work on the case. There are about 117 partners and counsel at the firm who worked on Madoff during the four month period covered by the $47.9 million fee request, and close to 200 associates. Not to mention dozens of paralegals, clerks, library staff and other non-legal staff. More in Financial Fraud Law [...]