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Punishing the Victims: Madoff Trustee Files First Clawback Case

By Michael MacPhail, Esq.

    On April 8, 2009, Irving Picard, the trustee for Bernard L. Madoff Investment Securities, LLC ("BLMIS") filed his first case seeking the return of a "preferential" transfer from BLMIS to a British Virgin Islands entity, Vizcaya Partners Ltd. ("Viscaya") and its Spanish custodial bank.    The complaint alleges that on October 31, 2008, BLMIS transferred nearly $150 million to Vizcaya which is described as customer property subject to turnover.  In seeking the return of these funds, the trustee states that he "must use his authority . . . to pursue recovery from customers who received preferences and/or payouts of fictitious profits to the detriment of other defrauded customers whose money was consumed by the Ponzi scheme."       At first blush, seeking such a large sum from an offshore entity with a foreign-sounding name seems justifiable...continue to full post

Full post as published by NASD, SEC and Regulatory Defense Blog on April 12, 2009 (boomark / email).