Madoff Kin Seek End To Lawsuit

Oct 7 2010 | 11:55am ET

Family members of Bernard Madoff have asked a judge to dismiss a lawsuit filed against them by the court-appointed receiver in the case.

Lawyers for the Ponzi scheme mastermind’s sons, Mark and Andrew, brother Peter and niece Shana said there is no basis for the $198.7 million lawsuit filed against their clients last October. All four of the sued Madoffs worked at Bernard L. Madoff Investment Securities before it collapsed following the revelation of Bernard Madoff’s $65 billion fraud.

“If you read it as if their names are not Madoff, if the names were Richardson, this case would not have been brought,” Marty Flumenbaum, who represents Mark and Andrew Madoff, told U.S. Bankruptcy Judge Burton Lifland. The sons “were not told by Bernard Madoff they would have any role in the investment advisory business,” from which their father ran the Ponzi scheme.

All four of the sued Madoffs say they worked for BLMIS’s two legitimate business units.

But a lawyer for Irving Picard, the trustee, disputed that notion.

“Bernard Madoff was telling the market that the sons were fully involved and if something were to happen to him, they were ready to take over,” John Siegal said. And Lifland, who reserved judgment, seemed likely to agree.

“This is not Merrill Lynch where you might have rouge activity,” the judge said. “This is a real close family and any rouge activity that took place over time would be easily discernible, one would think.”

No matter, according to the Madoffs, as Picard’s lawsuit does not actually accuse them of any specific wrongdoing and cites no evidence that the four had compliance responsibilities at the firm. Instead, it is made up of “sweeping conclusory statements.”

Lifland did not indicate when he would rule on the dismissal bid.


In Depth

OmniQuest Capital: Why Funds of Hedge Funds Work

Aug 11 2016 | 4:47pm ET

There have been few sectors of the alternative investment universe under as much...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...