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Appeals Court: Madoff's Victims Can't Claim Fake Profits

2011_08_madoff3.jpg After years of bickering, a federal appeals court has ruled that victims of Bernard Madoff's massive Ponzi scheme are only entitled to recover the money they actually put into the fake investment fund—not the imagined profits. As Bloomberg News reports, "The federal appeals court in New York said today that trustee Irving Picard can calculate losses by subtracting the amount withdrawn from an investor’s account from the total placed with Madoff, the so-called net investment method."

Madoff's many victims had been fighting to get the whole value of their investment, as printed on the fake-investment statements, back (as one victim said in 2008, "The point with him was that I always got every document. If you get all the documents, you are not suspicious"). But Picard had argued victims shouldn't be expecting their 950% returns on investment. Chief U.S. Circuit Judge Dennis Jacobs wrote in the opinion, "Mr. Picard’s selection of the net investment method was more consistent with the statutory definition of ‘net equity’ than any other method advocated by the parties or perceived by this court."

Lawyers for victims said they would appeal the ruling and criticized it for ruining "investor confidence in the capital markets." Another likely unhappy party: Sterling Equities, the owner of the Mets, which would now have to pay back $300 million if the ruling stands.

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Comments [rss]

  • SonnyBobiche

    That it took this long for common sense to prevail just shows what a bunch of greedy , entitled whiners we have in this country.  You make mistakes, bad luck happens and you move on.  Lawyers have convinced most of the country that nothing that ever happens to you is ever your fault . It's always someone else and they should pay.

  • ANGRYGOD11

    How does one claim profits due from an illegal business? True, they didn't know they were investing money into a Ponzi scheme, but they do now and they know a good part of the money is gone.

  • LtWorf

    Idiots. If they received their initial investment, they should be THANKFUL THEY GOT ANY MONEY BACK TO BEGIN WITH. That's the thing with investing in any type of fund that's not backed by the government: there will always be a certain amount of risk, from market fluctuations to even that of fraud.

  • jibbly

    Correct, but I would add "greedy" in front of "idiots".

    Making claims on money that didn't actually exist is insanity and I'm not sure why they're sinking more money and time into this issue.

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