Madoff 'Net Winners' Lose Out

Law360, New York (September 2, 2011, 1:31 PM EDT) -- In a decision likely to affect thousands of Madoff investors, the Second Circuit Court of Appeals on Aug. 16, 2011, unanimously upheld the method used by the liquidating trustee for Bernard L. Madoff Investment Securities LLC (“BLMIS”) to calculate investors’ “net equity” when determining how customer property will be distributed in the BLMIS liquidation.[1]

The ruling means that customers of the failed broker-dealers who withdrew more money than they deposited into BLMIS (the so-called “net winners”) will not be able to recover additional funds until all...
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