Why Continuing Attacks On In Pari Delicto Will Fail

Law360, New York (September 11, 2013, 2:50 PM EDT) -- Litigation in the wake of corporate frauds is keeping the in pari delicto defense in the news — and its critics apoplectic. The in pari delicto defense bars a corporation whose management committed fraud from suing third parties to cover its losses. Those third parties usually are, of course, the company’s auditors, lawyers and bankers. Most recently, the defense prevented the trustee in the Madoff matter from suing JP Morgan and other big banks that provided services to Madoff’s company but did not detect his fraud....
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