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Tuesday, July 27, 2010

Trustee could sue 1,000 Madoff investors

(Reuters) - The trustee overseeing the liquidation of Bernard Madoff's asset management firm might sue about 1,000 former clients of the now-imprisoned swindler who he believes made a profit on their investments.

Irving Picard, the court-appointed trustee, "could sue" about half of the estimated 2,000 former Madoff clients whom he considers "net winners," or those who withdrew more money than they put in, a spokesman said.

Picard has until December to file such "clawback" lawsuits, marking the two-year anniversary of Madoff's December 11, 2008 arrest and the start of criminal and civil proceedings.

While Picard would prefer to settle, "we have received few responses, if any, to our overtures," the spokesman said.

Many so-called "net winners" consider themselves victims of Madoff's estimated $65 billion Ponzi scheme and have argued that clawback lawsuits will increase their financial pain.

They contend that, while they may have taken out more money than they deposited while investing with Madoff, they suffered losses when the fraud was exposed.

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