UK Court Rejects Madoff Feeder Fund's Clawback Suit

Law360, Los Angeles (April 16, 2014, 6:23 PM EDT) -- A U.K. appeals court decided Wednesday that Fairfield Sentry Ltd., which fed billions of investor dollars into Bernard Madoff's notorious Ponzi scheme, couldn't recover payments made to investors who redeemed their shares before the scheme collapsed because certificates documenting the transactions were binding.

The Judicial Committee of the Privy Council, overturning a decision by a lower judge, said the mutual fund couldn't rescind the transactions because monthly emails, contract notes and monthly statements of account issued surrounding the redemptions communicated information in documentary form and thus qualified as “certificates."

The fund's liquidators, who are trying to claw back proceeds from shares...

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