Bernie Madoff’s sons and London based directors cleared in civil claim
Over £1 billion of funds passed through Bernie Madoff’s London office each year yet on Friday a £33 million civil claim against his brother, son and six former directors of the firm was dismissed.
At London’s High Court, Judge Andrew Popplewell dismissed “unfounded” claims brought against Madoff’s brother Peter, his son Andrew and his late son Mark as well as those against Stephen Raven, chief executive of the British unit, Sonja Kohn, the Austrian founder of the Bank of Medici, and others. In his ruling, the judge stated:
“This unfounded claim… has been pursued aggressively and relentlessly over several years, on occasion with an unfair degree of hyperbole”.
The judge also commented that the “honesty and integrity” of all the defendants had been “vindicated” during proceedings that turned “all their lives upside down” and that Mrs Kohn, in particular, “suffered poisonous press releases by the SIPA [Securities Investor Protection Act] Trustee and been subject to a worldwide freezing order and extensive disclosure of her family’s assets and affairs”. Trevor Jenkin, who defended Stephen Raven, added:
“We are delighted that the court has finally put an end to this unnecessary litigation, which should have been dismissed long ago. Its only achievement has been to rack up millions of pounds in legal expenses for the creditors of Madoff Securities International”.
Andrew Madoff’s representative, Martin Flumenbaum, went further and argued that “the decision confirms what Mark and Andrew stated from Day 1 — that they did not know of or participate in the fraud perpetrated by their father”.
Grant Thornton, the liquidators, however, announced afterwards that they are “considering their position” and commented:
“We are obviously extremely disappointed with the judgment handed down today as claims made against the defendants were serious and there was undoubtedly a case to answer”.
Given that the Serious Fraud Office also dropped their probe into Madoff’s British operations in 2009 due to their being “insufficient evidence to provide a realistic prospect of conviction”, this represents a major setback for Irving Picard, the trustee of Madoff’s seized assets and the financier of the London lawsuit, especially given of Andrew Madoff and his brother, Judge Popplewell commented:
“An honest and intelligent man in the position of each brother could reasonably have believed that the payments were in the interests of the company… The brothers held Bernard Madoff in the high respect which the latter’s record, reputation and position as paterfamilias commanded… I very much regret that I must have added to their burden by the time it has taken to prepare this judgment… The resolute and temperate way they have conducted themselves in these proceedings does them great credit”.
Picard has a further case against Andrew Madoff and other family members in America.
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