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Bernie Madoff was convicted of fraud in 2009, but the court battle to recover money lost by investors continues on. Today the Supreme Court will decide if it is going to hear arguments that would allow Irving Picard, the trustee for Madoff investors, to pursue offshore fund transfers. Depending on how the Supreme Court decides, more than $2 billion could be recovered for investors that lost money in the Ponzi scheme.
Picard has already recovered $14 billion for investors. However, foreign banks hold more than $2 billion in overseas transfers from Madoff's feeder funds. Clawing back that money has been difficult because of how the bankruptcy code works. The foreign banks that hold the money were initially successful at arguing in court that Picard can't pursue the transfers they hold because they are outside of the US. Then, in 2019, the Second Circuit overturned that decision.
According to the Second Circuit, what matters is that the transfers originated with a US firm, not that they ended up offshore. The banks appealed to the Supreme Court, which is set to review the case today.
David Flugman, a partner at law firm Selendy & Gay, who represents Herald Fund SPC, one of the largest investment fund victims of the Madoff Ponzi scheme, tells Opalesque that the case could have significant implications for the bankruptcy code. "Recently the Court has turned its eye to the issue of extraterritoriality," Flugman says. "It's not explicitly clear how far a ...................... To view our full article Click here
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