Judge Rules Feeder Fund Investors Can't Recover Madoff Funds
A federal judge in Manhattan has ruled investors in feeder funds that placed their money with convicted Ponzi schemer Bernard Madoff are not entitled to any money from the bankruptcy estate.
The ruling by U.S. District Judge Denise Cote affects about 1,700 investors, report CNN Money, Reuters and the Wall Street Journal (sub. req.). Cote ruled the investors didn’t have Madoff accounts in their names, and they didn’t qualify as customers under the Securities Investor Protection Act.
The ruling upholds a decision by bankruptcy trustee Irving Picard.
Meanwhile, in separate legal action, Picard has sued California Attorney General Kamala Harris and four others in an effort to stop Madoff-related litigation. He says the California suits against the estate of a deceased money manager who funneled funds to Madoff could interfere with his efforts to recover money.
