Tuesday, 27 September 2016
Last updated 18 hours ago
Dec 10 2013 | 12:12pm ET
The wives of Bernard Madoff's sons are—for the most part—not fair game for the trustee seeking to recovery money for the arch-fraudster's victims, a judge has ruled.
U.S. District Judge Jed Rakoff earlier this month spared Stephanie Mack and Deborah Madoff from most of Irving Picard's claims against them, although he said that the trustee could still sue them—and their husbands—for "breach of fiduciary duty," as well as seeking other ways to recover money from them. Mack is the widow of Madoff's eldest son, Mark, who committed suicide three years ago; Deborah Madoff is still married to younger son Andrew Madoff.
The wives, Rakoff ruled, were not "insiders or even Madoff Securities employees. Indeed, it is uncontested that the spouses themselves were in no way involved in Madoff Securities' fraud."
Rakoff also threw cold water on Picard's effort to recover money from some Madoff feeder funds, saying such actions might not be permitted and asking a federal bankruptcy court to decide.
Picard has recovered about $9 billion from the Madoff scam, which collapsed with the Ponzi scheme's five years ago this week. About $17 billion were lost in the fraud.