Posted Nov 02, 2011 02:42 pm CDT
A federal judge has barred Madoff trustee Irving Picard from pursuing about $20 billion in claims against two banks, JPMorgan Chase & Co. and UBS.
U.S. District Judge Colleen McMahon of Manhattan said Picard could bring suits for harm caused to the bankrupt estate, but not for harm caused to Bernard Madoff’s investors, the New York Times reports. Picard had alleged the banks harmed the investors by ignoring evidence of fraud by Bernard Madoff.
Under the ruling, Picard will still be able to pursue a claim for fictional profits the banks allegedly withdrew through the Ponzi scheme.
The Wall Street Journal (sub. req.) says the ruling is “one of the biggest blows” to the trustee’s efforts to recover money for Madoff victims. He has had prior successes, however, helping recover about $11 billion of an estimated $17.3 billion in lost principal.