Stern Wrests $11M Arbco Clawback From Bankruptcy Court

Law360, New York (July 17, 2012, 3:10 PM EDT) -- A bankruptcy court cannot resolve an $11 million clawback suit by the trustee for Ponzi-scheming investment firm Arbco Capital Management LLP, a New York federal judge ruled Thursday, citing the U.S. Supreme Court's landmark decision in Stern v. Marshall.

U.S. District Judge J. Paul Oetken said a bankruptcy court could hear but not enter final judgment on claims by Arbco Chapter 7 Trustee Richard O'Connell against Penson Financial Services Inc., which cleared and settled Arbco's trades before the investment firm was forced into bankruptcy by angry...
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