Madoff Feeder Fund Investors Can't Sue Under SIPA

Law360, New York (June 28, 2011, 8:05 PM EDT) -- A New York bankruptcy judge ruled Tuesday that investors who bought shares in feeder funds that set up accounts with convicted Ponzi schemer Bernard Madoff's securities firm were not customers of the company under the Securities Investor Protection Act.

U.S. Bankruptcy Judge Burton R. Lifland said that because the investors bought ownership interests in the feeder funds and signed over their rights to make investment decisions to the managers of the funds, they did not have claims with Bernard L. Madoff Investment Securities LLC.

"The objecting...
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