A federal appeals court dealt the trustee working to recover money for Bernard Madoff’s investors a setback Thursday, ruling that he doesn’t have legal standing to make claims against major financial institutions that customers who were burned could make themselves.
The 2nd U.S. Circuit Court of Appeals in Manhattan upheld earlier district court decisions barring trustee Irving Picard from pursuing tens of billions of dollars from JPMorgan Chase, USB AG and other institutions. Picard has claimed that the institutions were complicit in the massive Ponzi scheme because they provided financial services while ignoring obvious signs of the scam.
The appeals court found that as trustee, Picard “stands in the shoes” of the convicted criminal’s investment company and was therefore barred under state laws “from suing to recover for a wrong that he himself essentially took part in.”
“Picard’s scattershot responses are resourceful, but they all miss the mark,” the 2nd Circuit said.