Picard Can’t Appeal ‘Good Faith’ Madoff Clawback Ruling

U.S. District Judge Jed Rakoff refused on Monday to let the liquidating trustee for Bernard L. Madoff’s defunct firm seek appellate review of a decision weakening clawback suits against investors affected by the Ponzi scheme, saying the cases should not “languish” while the Second Circuit tackles a narrow question of law. Ruling against both Bernard L. Madoff Investment Securities LLC trustee Irving Picard and the Securities Investor Protection Corp., Judge Rakoff declined to allow an appeal of a May decision that put the onus on Picard to plead adequately that investors affected by the notorious $65 billion fraud showed a lack of good faith. Picard had asked for an interlocutory appeal on the grounds that the suits could be sent back to “square one” if the appeals court later reversed Judge Rakoff’s holding that the defendants could challenge the assumption that they were sophisticated market participants who, while not necessarily aware of the scheme, breached their duty to investigate suspicious Ponzi scheme returns. More on Law360 here.