More On Legal & Compliancefrom The Advisor's Professional Library
- Scope of the Fiduciary Duty Owed by Investment Advisors A fiduciary obligation goes beyond the suitability standard typically owed by registered representatives of broker-dealer firms to clients. The relationship is built on the premise that the advisor will always do the right thing for the person or entity receiving advice.
- Anti-Fraud Provisions of the Investment Advisers Act RIAs and IARs should view themselves as fiduciaries at all times, whether they meet the legal definition or not. Deviating from the fiduciary standard of full disclosure while courting clients may cause the advisor significant problems.
The controversy over the Mets owners’ involvement with the con man Bernie Madoff came to a swift and sudden end on Monday as a settlement was reached just before trial.
The owners, Fred Wilpon and Saul Katz, agreed to pay $162 million to the Madoff trustee Irving Picard, according to a story from MLB.com posted on the Mets’ website.
According to the story, Wilpon and Katz will not pay anything for three years.
Jury selection was scheduled to begin Monday for a trial that was to determine whether Wilpon and Katz could prove they were not "willfully blind" to Madoff's scheme, for which Madoff is serving a 150-year sentence at a North Carolina federal prison.
Judge Jed Rakoff ruled earlier this month that Wilpon and Katz would have to forfeit as much as $83 million in allegedly ill-gotten gains and go to trial over another $303 million.
The $162 million settlement figure is a total figure that includes the $83 million. Moreover, the Mets owners can recover that money through their own claims, totaling $178 million, against the Madoff estate.
"In a sense, we're now partners," David J. Sheehan, a lawyer for Picard, told The Associated Press outside the courthouse.
Picard had said that the Mets owners knew, or should have known, that Madoff's investment scheme was a fraud.
"Now I guess I can smile. ... Maybe I can take a day off," Wilpon said, according to the AP. "I am very, very pleased for ourselves and our families. This was really a team effort."
Rakoff said Picard had reviewed the evidence and would no longer pursue a claim of "willful blindness" against the defendants.