The trustee liquidating Bernard Madoff’s business can’t sue to recover money transferred by foreign financial firms to investors abroad, a U.S. judge said, cutting off another avenue to compensate victims of the country’s biggest financial fraud. U.S. District Judge Jed Rakoff in Manhattan ruled that the trustee, Irving Picard, is barred from using a provision of bankruptcy law to force the customers of overseas feeder funds, which pooled their assets for investment in Madoff’s fraud, to return the money to Picard. The ruling was made public today. More on Bloomberg [...]

A Manhattan federal judge has limited the ability of the trustee seeking money for victims of Bernard Madoff’s Ponzi scheme to recoup sums that may have been fraudulently transferred outside the United States. In a decision on Sunday, U.S. District Judge Jed Rakoff said the trustee, Irving Picard, could not invoke federal bankruptcy law to recover money transferred outside the United States between foreign entities, citing a presumption that the law does not apply extraterritorially. According to court records, the decision affects several dozen lawsuits brought by Picard, who is liquidating Bernard L. Madoff Investment Securities LLC. More on Reuters [...]

The passage — or failure — of a single piece of legislation is going to tell us a lot about whether Congress represents the people of the United States or just its financial service industry donors. The legislation is the Restoring Main Street Investor Confidence and Protection Act, HR 3482 and Senate bill S.1725. The website govtrak.us gives the bill only a 23 percent chance of passage. So we have a good test, right now, of whether the folks we vote for actually represent us. Here’s the story: The Restoring Main Street Investor Confidence and Protection Act would define the value of a person’s brokerage account — the net equity — as the value of the account based on the last statement from the brokerage house. More in Dallas News [...]

Five years ago Sunday, Bernie Madoff was sentenced to 150 years in prison for running the biggest fraudulent scheme in U.S. history. Even now, only a few of his victims have since regained all of their losses. A well-respected financier, Madoff convinced thousands of investors to hand over their savings, falsely promising consistent profits in return. He was caught in December 2008 and charged with 11 counts of fraud, money laundering, perjury, and theft. Here’s how Madoff conned his investors out of $65 billion and went undetected for decades: Madoff used a so-called Ponzi scheme, which lures investors in by guaranteeing unusually high returns. The name originated with Charles Ponzi, who promised 50% returns on investments in only 90 days. More on Business Insider [...]

Recently, victims of the fraudulent Ponzi scheme of Bernie Madoff suffered a big blow as the U.S. Supreme Court turned down the appeal seeking to recoup more money for them. Irving Picard, the trustee liquidating the Bernard L. Madoff Investment Securities LLC, had requested the apex court to hear his challenge to a ruling given by the Second Circuit Court of Appeals last year. Rebuffing the petition, this latest Supreme Court decree defends an earlier verdict by a lower US court that rejected Mr Picard’s appeal to prosecute the banks as accomplices in the fraud. With the Supreme Court verdict, banks such as HSBC Holdings plc ( HSBC ), UBS AG ( UBS ) and UniCredit SpA breathed a sigh of relief, having been exonerated from over $10 billion legal claims stemming from the Bernard Madoff Ponzi scheme. Nevertheless, according to Picard’s spokeswoman, with due respect to the apex court verdict, the trustee’s $3.5 billion bankruptcy claim still remains alive against these international banks. More on Nasdaq [...]

The U.S. Supreme Court on Monday turned away an appeal by a court-appointed trustee who was seeking to sue several banks on behalf of victims of Bernard Madoff’s Ponzi scheme. The court’s action closes one legal avenue for trustee Irving Picard, who had sought to press lawsuits against banks including UBS AG UBSN.VX +1.29% , HSBC Holdings HSBA.LN +0.89% PLC and UniCredit UCG.MI +2.45% SpA, alleging they aided the Madoff scheme, collecting steep fees while ignoring warning signs of the massive fraud. Lower courts in New York ruled Mr. Picard didn’t have legal standing to bring those claims on behalf of Mr. Madoff’s victims. The Supreme Court left those rulings in place, rejecting Mr. Picard’s appeal without comment. More in the Wall Street Journal [...]