SEC Hit With Investor Lawsuit Over Madoff Snafu

Law360, New York (October 14, 2009, 6:47 PM EDT) -- Two investors burned by Bernard Madoff's Ponzi scheme have filed suit against the U.S. Securities and Exchange Commission for failing to catch the disgraced financier earlier.

New York investors Phyllis Molchatsky and Steven Schneider sued the SEC Wednesday in the U.S. District Court for the Southern District of New York, saying the commission showed “serial, gross negligence” and is responsible for more than $2.4 million in losses they sustained when the scheme collapsed.

Molchatsky, a retiree, entrusted $1.7 million — almost all her money — to...
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