2nd Circ. Limits SIPA Trustee Power In Madoff Case

Law360, New York (June 20, 2013, 12:51 PM EDT) -- The trustee liquidating Bernard L. Madoff's firm cannot sue JPMorgan Chase & Co. and other top banks on behalf of Ponzi scheme victims for allegedly aiding the fraud, the Second Circuit ruled Thursday in a decision that broadly restricts the power of Securities Investor Protection Act trustees.

A three-judge panel ruled that Madoff trustee Irving H. Picard cannot sue JPMorgan, HSBC Holdings PLC, UBS AG and UniCredit SpA on behalf of Bernard L. Madoff Investment Securities LLC, or BLMIS, because as a SIPA trustee Picard stands...
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