California Attorney General Kamala Harris would wind up helping her home state or "a select group" of investors if she is allowed to recoup illegal profits from the Bernard Madoff Ponzi scheme, the liquidator of the con man's brokerage said, Bloomberg News reported yesterday. Trustee Irving Picard is trying to stop Harris's suit, saying that she is breaking the law by suing former investment adviser Stanley Chais’s estate to recoup $270 million in illegal profits. Harris, like New York Attorney General Eric Schneiderman in asserting a right to pursue local wrongdoing, has said that her suit is legal because she is exercising her policing power under state law. Under bankruptcy law, Harris's suit might be barred if it had a monetary goal that conflicted with Picard’s effort to recoup money for people with claims he had validated. Harris has said that she is using California's consumer protection and securities laws to impose penalties that will deter other wrongdoers.
