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A U.S. appeals court said the trustee who was winding up Bernard Madoff’s company could bring a $ 343.1 million recovery lawsuit against Citigroup Inc, a move that could help the late scammer’s clients recover near of the estimated $ 17.5 billion they lost in his Ponzi scheme.
| Teleprinter | Security | Last | Switch | Switch % |
|---|---|---|---|---|
| VS | CITIGROUP, INC. | 71.67 | -1.32 | -1.81% |
The 2nd United States Court of Appeals in Manhattan ruled Monday that lower court judges were wrongly asking trustee Irving Picard to prove that Citigroup was lacking in good faith by being “willfully blind” to “red flags” suggesting a strong probability of fraud.
He said the correct standard was whether the New York-based bank knew of “suspicious facts” about Madoff that would have caused a reasonable person to follow up.
BERNIE MADOFF HAD ORTETS AMPUTED IN THE LAST DRAMATIC DAYS OF HER LIFE
Seanna Brown, a lawyer representing Picard, in a statement, called the decision a “significant victory” for Madoff victims that could help the trustee recover $ 3.75 billion, in addition to the nearly $ 14.5 billion. dollars he has already collected.
Brown said the ruling involved around 90 lawsuits and should help victims “get as close as possible to recovering 100% of their losses.”
A U.S. appeals court has said the trustee liquidating Bernard Madoff’s business may bring a $ 343.1 million recovery lawsuit against Citigroup Inc, a move that could help the late con artist’s clients recover nearly of the $ 17.5 billion they lost
Citigroup declined to comment. Brown and Picard are partners at Baker & Hostetler law firm.
The $ 343.1 million represented the money Citigroup received between 2005 and 2008 from a Madoff “feeder fund”, Rye Select Broad Market Prime Fund LP, which had borrowed from the bank to invest with Bernard L. Madoff Investment. Securities LLC.
Picard said Citigroup accepted this money despite internal suspicions that Madoff’s business activity and ROIs were a sham.
U.S. bankruptcy judge Stuart Bernstein in Manhattan dismissed Picard’s case after another judge, U.S. District Judge Jed Rakoff, imposed the standard of willful blindness.
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But in Monday’s 3-0 decision, Circuit Judge Richard Wesley said the clear sense of good faith in the US Bankruptcy Code required Citigroup to be on “a notice of investigation” only for fraud. Madoff.
The appeals court also revived similar lawsuits against two other companies.
Madoff died on April 14 at the age of 82 in prison, serving a 150-year sentence.
The business is Picard v. Citibank NA et al, 2nd US Court of Appeals, No. 20-1333; and Picard v. Legacy Capital Ltd et al in the same court, No. 20-1334.
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