Madoff Trustee Picard Can’t Claw Back Funds From `Net Winners,’ 2d Cir. Rules

Madoff trustee Irving Picard was dealt a major setback Dec. 8 by the U.S. Court of Appeals for the Second Circuit in his efforts to recover funds distributed to customers of Madoff’s brokerage firm before the fraudster’s massive Ponzi scheme was revealed (In re Bernard L. Madoff Investment Securities LLC, 2014 BL 343123, 2d Cir., 12-2557-bk (L), 12/8/14).

In a decision by Judge Barrington Parker, the appeals court affirmed that the payments received by customers of Bernard L. Madoff Investment Securities LLC are shielded from clawback by Bankruptcy Code Section 546(e) 88 DER EE-6, 5/7/12, 88 Securities Law Daily, 5/8/12, 44 SRLR 975, 5/14/12