More news on the Madoff front that is sure to make some folks very unhappy.
The 9th Circuit ruled yesterday that Madoff’s investors can’t sue the Securities and Exchange Commission (SEC). The investors first brought the case against the agency in 2010, after the inspector general found that the SEC missed several opportunities to uncover the fraud.
Quick refresher: In December 2008, investment adviser Bernie Madoff was arrested for securities fraud after he masterminded one of the largest and longest-running Ponzi schemes in U.S. history. In the end, he cheated his clients out of between $18 billion and $20 billion.
According to the investors who filed suit, through its negligence and omission, the SEC allowed Madoff to “continue, perpetuate and expand” his Ponzi scheme. They claim they only invested with Madoff because of the SEC’s “implied stamp of approval.”
In 2010, a district court dismissed the case, and yesterday the 9th Circuit upheld that dismissal, saying, “We conclude that the district court correctly concluded that it lacked jurisdiction to entertain appellants’ claims.”
Richard M. Gordon, a former Madoff investor and the lawyer arguing the case, says he plans to appeal the 9th Circuit’s ruling.
Meanwhile, Madoff is likely watching the story continue to unfold from his prison cell, where he will be spending the rest of his life.
For more InsideCounsel stories about the Madoff scandal, see: