Madoff Trustee's $30 Billion Bank Lawsuits Blocked

Jun 21 2013 | 11:28am ET

The trustee in the Bernard Madoff case cannot seek some $30 billion from the fraudster's banks, a federal appeals court ruled yesterday.

The U.S. Second Circuit Court of Appeals in Manhattan refused to overturn two lower-court decisions barring Irving Picard from suing JPMorgan Chase, HSBC Holdings and others. The decision is a major hit to Picard's goal of collecting enough money to make Madoff's victims whole.

"Picard stands in the shoes" of the Ponzi schemer "and may not assert claims against third parties for participating in a fraud that BLMIS orchestrated," the three-judge panel ruled. The ruling also said that Picard's responses were "scattershot" and "missed the mark."

Picard is reviewing the decision and may appeal it, his spokeswoman said.

Picard has collected about $9.3 billion of the $17 billion lost in the Madoff fraud. His spokeswoman said he still has about $4 billion in outstanding lawsuits.

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