Irving Picard pulled out all the stops in a bid to revive mega-billions claims against big banks that allegedly played a role in Bernie Madoff's massive Ponzi scheme. But it wasn't enough. On Thursday, a unanimous three-judge panel of the U.S. Court of Appeals for the Second Circuit rebuffed every single one of Picard's arguments in a 60-page opinion, ruling that the Baker & Hostetler partner's role as liquidation trustee for Madoff's firm bars him from targeting the banks.
Picard has built up an impressive track record recovering funds on behalf of Madoff investors, but he hit a brick wall in the federal courts with accusations that major banks should be held liable for facilitating Madoff's fraud. In a series of rulings in 2011 and 2012 (see our coverage here, here, and here), U.S. District Judges Jed Rakoff and Colleen McMahon in Manhattan threw out close to $80 billion in claims that Picard brought against HSBC, JPMorgan Chase, UBS, UniCredit S.p.A., HSBC Bank, and others.
The Second Circuit affirmed those rulings on Thursday, ruling that Picard can't sue the banks under the Securities Investor Protection Act and can't bring common law claims such as fraud or unjust enrichment. Citing the doctrine of in pari delicto, which holds that bad actors can't recover money from others that participated in the same wrongdoing, the panel concluded that while Picard didn't commit Bernie Madoff's crimes, his position as trustee puts him in Madoff's shoes.
*May exclude premium content
Already have an account? Sign In Now
Interested in customizing your subscription with Law.com All Access?
Contact our Sales Professionals at 1-855-808-4530 or send an email to email@example.com to learn more.