“Made Off” with the Money
Bernard Madoff allegedly bilked investors out of $50 billion and it appears there will not be enough assets left in the investment firm to reimburse investors who were victimized by the giant Ponzi scheme.
However, Madoff’s indirect investors, people who invested with a broker or hedge fund that then turned the money over to Madoff, may have a good shot at a winning at least a partial refund.
Brokers and hedge funds must conduct a due diligence investigation before turning a client’s money over to another investment firm. In the Madoff debacle, middlemen that acted as a go-between are now facing lawsuits from angry investors claiming a lack of due diligence, Fortune magazine reports.
The suits allege that Madoff’s middlemen such as Ascot Partners of New York City ignored red flags even as other funds avoided Madoff’s investments because of the presence of obvious danger signs.
Madoff, the former chairman of the Nasdaq Stock Market, was arrested last week by agents with the U.S. Federal Bureau of Investigation and charged by federal prosecutors with one count of fraud. The Securities and Exchange Commission filed separate civil charges against 70-year-old Madoff.
This week, a federal judge ordered the U.S. operation of Bernard L. Madoff Investment Securities LLC to be liquidated. A court-appointed trustee will seize any remaining assets and attempt to return it to investors.
Carey & Danis pursues numerous securities fraud cases on behalf of defrauded individual and institutional investors. Investors who wish to discuss their rights against Madoff Investment Securities may contact Carey & Danis toll-free at 800-721-2519 or fill out our online contact form.
