2nd Circ. Says Picard Can't Claw Back From Madoff Customers

Law360, New York (December 8, 2014, 2:15 PM EST) -- The Second Circuit refused Monday to allow Bernard Madoff trustee Irving Picard to claw back over $1.6 billion from investors who received profits before Madoff's historic Ponzi scheme collapsed, applying the broad definition of "securities contract" in the Bankruptcy Code even though the firm never actually carried out securities transactions in the accounts.

The panel ended Picard's attempt to retrieve money in 84 clawback cases from investors who were able to collect profits before the scheme was revealed. Picard had argued that the investors did not have securities contracts under the Bankruptcy Code because there were no actual securities transactions, making...

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