Litigation gathering pace in Madoff case

With huge and complex fraud cases it can take years to unravel the multifarious aspects of such a case. Mr Madoff has been sitting in jail already for quite some time, and has over 145 years left to serve, but it is only now that litigation is starting seeking to ascribe blame (in part) to big institutions who are alleged perhaps to have known more than they let on or to have perhaps been negligent.

A number of banks are now facing the prospect of being sued. In the last week, proceedings were commenced against Barclays Plc for just shy of $70 million.

As is a feature of these types of complex Ponzi frauds, one of the matters holding up the litigation previously was the fact that a number of companies involved have gone bust either due to being set up to facilitate the fraud or perhaps victims of it. This in turn results in the trustees seeking to recover on behalf of victims needing to negotiate to take an assignment of the right to sue on behalf of that company, if the liquidated company is the correct and only legal entity that has the right to litigate.

We will keep a watching brief on the fascinating outcome of this wave of litigation. To put it into context, thus far, the trustee has filed over 1,000 lawsuits on behalf of Madoff victims, and is looking to recover over $94 billion !