Madoff Trustee Tells 2nd Circ. Customer Cash Is Fair Game

Law360, New York (March 5, 2014, 8:28 PM EST) -- The trustee for Bernie Madoff’s collapsed investment firm on Wednesday urged the Second Circuit to revive hundreds of suits seeking to claw back payments to the fraudster's customers, arguing the tainted funds don't deserve a "safe harbor" under federal bankruptcy law.

David Sheehan, an attorney for trustee Irving Picard, said the customers shouldn’t be covered by Section 546(e) of the U.S. Bankruptcy Code, which protects transfers made by a debtor in relation to securities trading. The investment advisory business at Bernard L. Madoff Investment Securities LLC...
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