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Lawsuits are flying following the arrest of Wall Street money manager Bernard Madoff, but some of the nation’s largest plaintiffs’ firms are taking their time investigating potential claims, which they assert involve complicated legal issues. At the same time, dozens of lawyers at those firms are preparing to file lawsuits, which could number well into the thousands. Numerous banks, individual investors and charitable organizations have been identified as victims of Madoff, president of Bernard L. Madoff Investment Securities LLC. Madoff was charged with securities fraud last week after telling his sons that he had taken $50 billion from investors. Congress recently announced that it would investigate the Madoff scandal after U.S. Securities and Exchange Commission Chairman Christopher Cox ordered an internal inquiry into why his agency did not detect the Ponzi scheme for more than a decade. Also, on Dec. 12, Ruskin Moscou Faltischek, based in Uniondale, N.Y., filed a class action against Madoff and his firm. Last week, New York-based Abbey Spanier Rodd & Abrams filed a class action against a partnership that placed investments into Madoff funds, called Gabriel Capital LP, as well as its manager, J. Ezra Merkin, and independent auditor, BDO Seidman. BDO Seidman, Merkin and another of his funds, Ascot Partners, which has lost investments associated with Madoff, are defendants in a second lawsuit filed last week by Abbey Spanier on behalf of New York Law School. Also, Seattle’s Hagens Berman Sobol Shapiro has filed a class action against Stanley Chais, a Beverly Hills, Calif., resident, and his firm, the Brighton Co., which had investments in Madoff funds. Most firms, however, are continuing to investigate potential claims before filing a lawsuit. “There’s going to be litigation against, among others, the hedge funds and outside brokerages through which people invested,” said Brad Friedman, a partner at New York’s Milberg. “But the legal theories are very, very tricky and very dicey. You can get yourself thrown out of court real, real quickly.” Houston’s Susman Godfrey announced last week that its financial fraud task force is investigating claims associated with Madoff that could be brought against defendants such as hedge funds and financial advisors. Harry Susman, a partner at Susman Godfrey, said 10 lawyers in New York, Los Angeles and Houston are working on Madoff claims. Most of the firm’s lawsuits will involve individual investors, although some hedge funds could be potential plaintiffs.

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