Defense lawyers in the fraud trial of five former Bernard Madoff employees began closing arguments Thursday much as they started the case in October — attacking the Madoff henchman who became the prosecution’s star witness. Frank DiPascali, who confessed his role in the investment scam and testified against his former co-workers, is a “con man’s con man” without credibility, argued Larry Krantz, the defense lawyer for George Perez, a former Madoff computer programmer. More on USA Today [...]

Even after five years, it is still unclear what exactly JPMorgan Chase bankers knew about Bernard L. Madoff’s huge Ponzi scheme. A newly obtained government document does not provide the answer, but does shed some light on why the mystery remains, Ben Protess and Jessica Silver-Greenberg write in DealBook. The document reveals that JPMorgan and federal regulators fought over access to bank employee interviews, eventually pitting the Justice Department against the Office of the Comptroller of the Currency. The document shows that, around the time of Mr. Madoff’s arrest in December 2008, JPMorgan’s lawyers interviewed dozens of bank employees who might have crossed paths with Mr. Madoff’s company. Federal regulators at the comptroller’s office sought copies of the lawyers’ interview notes in the hopes that they would provide a glimpse into the bank’s actions, but JPMorgan refused to hand over the notes, citing confidentiality requirements like the attorney-client privilege. More in the New York Times [...]

Victims of Bernard Madoff’s epic fraud may be able to recoup only a small portion of the billions of dollars he allegedly funneled to selected customers in the last years of his Ponzi scheme. At a hearing on Wednesday, a panel of the 2nd U.S. Circuit Court of Appeals in New York appeared inclined to limit the extent to which the trustee liquidating Madoff’s firm may recoup “fictitious profits” and other transfers from customers. More on Reuters [...]

Five former employees of Ponzi scheme mastermind Bernard Madoff face criminal forfeiture of hundreds of millions of dollars in assets linked to the alleged scam if convicted in their federal conspiracy and fraud trial. Prosecutors and defense lawyers agreed Thursday that federal courts, not the trial jury, will decide on government legal motions to seize luxury homes, bank accounts and other assets held by the employees and their families. More on USA Today [...]

The Bernard Madoff trustee, who will try to reinstate hundreds of lawsuits through an appeal to be argued March 5 in Manhattan, had his chances of success dealt a blow last week when the U.S. Supreme Court decided a case involving R. Allen Stanford’s Ponzi scheme.
Madoff trustee Irving Picard is appealing a federal district court decision barring him from suing to recover transfers made more than two years before bankruptcy. Were Picard to succeed on appeal, he might eventually be able to pay defrauded customers in full. Customers’ recoveries currently are in the 56 percent range. In last week’s decision, called Chadbourne & Parke LLP v. Troice, the Supreme Court ruled in favor of defrauded customers, allowing them to sue firms and individuals who helped sell Stanford’s fraudulent securities. At first blush, Troice seems to help the Madoff trustee because the high court allowed defrauded investors to sue. Looking at the Troice opinion in detail, though, it’s at best unhelpful for Picard and customers who are suing third parties to recover their losses. More on Bloomberg [...]

Congressman Kevin Yoder [R-KS3] and Congressman Vance McAllister [R-LA5] have signed on to support H.R. 3482 – Restoring Main Street Investor Protection and Confidence [...]