More On Legal & Compliancefrom The Advisor's Professional Library
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
- How to Avoid Sabotaging Your Compliance Exam There is much more to compliance examination survival than knowing all of the rules. It helps to understand why the rules were put in placeand to recognize that examiners are not the enemy.
The Associated Press reported that U.S. Bankruptcy Judge Burton Lifland signed off on the Madoff settlement at the urging of a court-appointed trustee seeking to recover funds for thousands of investors burned by Madoff's epic Ponzi scheme.
"This is a unique and great day for customers of (Madoff's firm)," trustee attorney David Sheehan said Thursday at a hearing in federal bankruptcy court.
AP notes that lawyers representing a handful of former Madoff customers opposing the settlement signaled they would appeal — a move the judge warned could further harm wiped-out victims waiting to recover at least a portion of their life savings.
"You must take into account the effect of these delays," he said.
AP explains trustee Irving Picard and federal authorities reached the settlement last month with the estate of Jeffry Picower, a businessman and philanthropist who drowned in 2009 after suffering a heart attack in the swimming pool of his Palm Beach, Fla., mansion. Federal prosecutors have called the forfeiture the largest in Justice Department history.
Picard had sued Picower in a so-called clawback litigation, alleging his earnings from Madoff consisted of money stolen from other investors. However, Picower's widow, Barbara, has insisted he was in the dark about the fraud and he was never charged with a crime.
The $7.2 billion represents "every cent Picower ever received" from the fraud, Sheehan told the judge.
Sheehan said settlement negotiations were contentious and complicated by Picower's death. But in the end, he said, Barbara Picower did the right thing for the victims.
"She stepped up and stepped up big time," he said.
AP notes that Madoff, 72, is serving a 150-year prison term after admitting that for decades he used fraudulent account statements to trick investors into believing they had more than $60 billion invested in stocks. Investigators found, though, that no investments were made, and that an estimated $20 billion in principal was simply being paid out bit by bit to other investors.