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The Florida law firm co-founded by convicted Ponzi-schemer Scott Rothstein received bankruptcy court approval of its chapter 11 liquidation plan, Bloomberg News reported yesterday. Rothstein, who is serving a 50-year prison sentence, ran his $1.2 billion scheme from Fort Lauderdale, Fla.-based Rothstein Rosenfeldt Adler PA. He sold wealthy investors stakes in what he said were payouts in confidential sexual-harassment and workplace-bias cases. The cases turned out to be fabricated. U.S. Bankruptcy Judge Raymond B. Ray in Fort Lauderdale signed the confirmation order today. The plan includes a settlement with Toronto-Dominion Bank, which Rothstein used to launder the proceeds of his scheme. It bars investors from suing the bank and halts most pending state-court lawsuits against it.

In one of the first lawsuits to go to trial involving Bernard L. Madoff's massive fraud, a group of investors is nearing a settlement with a Connecticut bank that they said should have uncovered the Ponzi scheme years before it collapsed, the Wall Street Journal reported today. The tentative settlement, reached just as the two sides were about to deliver closing arguments, may return a fraction of the $60 million that the investors said they lost. But any sums could be a blow for the bank, Connecticut Community Bank and its branch, Westport National Bank, which are controlled by William R. Berkley, chairman of a large insurance company. The bank, which has reported losses for the last four years, also faces a $28 million lawsuit from the trustee overseeing the liquidation of Madoff's securities firm and it is operating under a formal order from the Office of the Comptroller of the Currency demanding operational improvements as a result of what the regulator said were "unsafe and unsound" practices and violations of the law.

A bankruptcy plan approved in the South Florida's $1.2 billion Scott Rothstein Ponzi scheme will likely restore money lost by hundreds of investors, the Associated Press reported on Friday. A federal bankruptcy judge on Thursday approved the liquidation plan for Rothstein's former Fort Lauderdale law firm. Much of the money is coming from TD Bank, which investor attorneys claim played a role in Rothstein's scam. The bank has denied wrongdoing but is paying about $363 million to Rothstein investors in a variety of judgments and settlements so far. Attorney William Scherer is seeking further financial sanctions against TD Bank over failure to release key documents.

Among the far-flung feeder funds, brokerage houses and institutions interconnected in the vast Ponzi scheme perpetuated by Bernard L. Madoff, one little-known local bank is now in the spotlight, the New York Times DealBook blog reported yesterday. Westport National Bank and its parent company, Connecticut Community Bank, is a basic community bank. It has one main office and nine affiliated branches, all within a small radius stretching from Fairfield to Greenwich, Conn. But to more than 200 individual investors, it was the bank that should have stood sentry over their money. A lawsuit brought by investors who lost a combined $60 million in the Madoff Ponzi scheme seeks to show that the bank failed at its job as the custodial bank in charge of their money.

Regulators yesterday announced that Scott N. Powers, the former CEO of Arizona-based mortgage loan originator American Mortgage Specialists Inc., and David McMaster, a former officer of AMS, were sentenced to serve 96 and 188 months in prison, respectively, for their roles in a $28 million scheme to defraud North Dakota-based BNC National Bank, according to a press release yesterday from the Special Inspector General of the Troubled Asset Relief Program (SIGTARP). In addition to their prison terms, Powers and McMaster were each ordered to pay a money judgment to the government of approximately $28,564,470 and also to pay restitution to BNC bank in that same amount. Powers and McMaster pleaded guilty on Oct. 19, 2012, to conspiracy to commit bank fraud and wire fraud affecting a financial institution. Read the full press release.

The Commodity Futures Trading Commission sued former MF Global Holdings Ltd. Chief Executive Officer Jon Corzine for failing to properly oversee the company as it spiraled toward bankruptcy in 2011, Bloomberg News reported yesterday. The regulator also sued MF Global’s former assistant treasurer Edith O’Brien and said that it reached a settlement with subsidiary MF Global Inc. to pay all funds due to customers and impose a $100 million penalty. That settlement is subject to court approval.

A top executive at brokerage firm ICAP PLC knew of an arrangement with UBS AG that U.S. and British regulators allege was part of a scheme to rig benchmark interest rates, the Wall Street Journal reported today. The ICAP executive, David Casterton, was included on emails between ICAP and UBS officials in 2007 as they negotiated a deal that regulators say was designed to compensate ICAP brokers for helping UBS traders manipulate the London interbank offered rate (Libor), and Casterton ultimately signed off on the arrangement. British regulators have described the arrangement, which they say involved UBS making quarterly payments to ICAP allegedly to reward brokers for helping rig Libor, as "corrupt." The Swiss bank admitted wrongdoing when it settled Libor-rigging charges with U.S. and British authorities last December.

Former All-Star outfielder Lenny Dykstra has been released from a California prison after serving time for bankruptcy fraud, the Associated Press reported on Friday. Dykstra, who had a 12-year career with the New York Mets and Philadelphia Phillies, was freed, according to federal Bureau of Prisons records, but no other details were available. Dykstra was sentenced in December to 6 and a half months in prison for hiding baseball gloves and other heirlooms from his playing days that were supposed to be part of his bankruptcy filing. He already had served seven months in custody awaiting sentencing. The prison term ran concurrently with a three-year sentence for pleading no contest to grand theft auto and providing a false financial statement.

A Virginia lawyer was sentenced to 15 years and eight months in prison for his role in a scheme that resulted in more than $100 million in losses on loans backed by the U.S. Small Business Administration, Bloomberg News reported yesterday. Joon Park admitted that from 2003 to October 2011, he and his co-conspirators submitted SBA loan applications with fraudulent documents including counterfeit cashier’s checks and falsified bank statements and tax returns, U.S. Attorney Rod Rosenstein of Maryland said yesterday. The phony paperwork was used to persuade SBA officials to approve loans under a program that requires business owners to invest specified amounts of their own money. Taxpayers, through the SBA, guaranteed 75 percent to 90 percent of each loan, with lenders on the hook for the rest, according to Rosenstein.

Former Enron Corp. Chief executive Officer Jeffrey Skilling is set to appear in court to learn how much longer he’ll stay in prison for spearheading the fraud that destroyed the world’s largest energy trader, Bloomberg News reported today. Under terms of a deal with prosecutors, Skilling could see his 24-year prison sentence cut by as much as 10 years, freeing him as early as 2017, if a U.S. judge approves it at a hearing today in federal court in Houston. In exchange for a shorter sentence, Skilling agreed to forfeit $45 million, drop his bid for a new trial and end litigation over his 2006 conviction and sentence. The former CEO’s prison term was already set to be reduced by nine years, thanks to a 2011 appellate-court ruling that sentencing guidelines were incorrectly applied in his case.