Madoff Trustee Can't Stop Feeder Fund Settlement

Apr 16 2013 | 1:17pm ET

A federal judge slapped down the court-appointed trustee in the Bernard Madoff case, blocking his bid to stop a settlement between New York State and a major Madoff feeder fund manager.

U.S. District Judge Jed Rakoff said Irving Picard waited too long before moving to prevent New York Attorney General Eric Schneiderman's lawsuit against J. Ezra Merkin. That suit was settled for $410 million last year.

"The trustee unreasonably and inexcusably slept on his rights," Rakoff ruled, noting that the delay hurt Merkin, his investors and the New York State courts.

"The trustee, however, having for more than three years issued empty threats to seek a halt to the attorney general's suit, has lost his right to complain," Rakoff wrote. "Even on the merits, moreover, his bluster proves to be without substance."

Picard, who is seeking $500 million from Merkin, said he would appeal Rakoff's decision, which a spokeswoman called "incorrect and contrary to law."


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...