A federal judge has limited the ability of the trustee seeking money for victims of Bernard Madoff's Ponzi scheme to recoup sums allegedly transferred fraudulently outside the U.S., Reuters reported yesterday. In a decision on Sunday, U.S. District Judge Jed Rakoff in Manhattan said that Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, cannot invoke U.S. bankruptcy law to recover transfers abroad between foreign entities, including Madoff "feeder funds" and banks. Judge Rakoff cited a presumption that the law did not apply to conduct outside the country, pointing to a 2010 U.S. Supreme Court decision that limited the reach of domestic laws. According to court records, the decision affects several dozen lawsuits that Picard has pursued, against defendants such as Spain's Banco Bilbao Vizcaya Argentaria SA, Bank Austria AG, Bank of America Corp's Merrill Lynch International unit and Royal Bank of Scotland Group Plc. It came six days after the Supreme Court let stand the dismissal of Picard's claims against banks he accused of enabling Madoff's fraud.
Madoff trustee Irving Picard will be providing a keynote titled “Tales from the Madoff Bankruptcy” at ABI’s 34th Annual Midwest Bankruptcy Institute on Oct. 17. For more information or to register, please click here: http://www.abiworld.org/MW14/