Bernie Madoff’s humongous Ponzi scheme failed, costing investors a fortune, because it was built on deceit. But the deception paid off for many years, delivering conjured-up profits to Madoff’s customers.
On Monday, investors who pocketed billions in the six years before the scheme collapsed deflected a bid by Madoff bankruptcy trustee Irving Picard to claw back a big chunk of their “fictitious” profits. Affirming a lower court judge, the U.S. Court of Appeals for the Second Circuit concluded that Picard’s campaign to recover much of the investors’ earnings is barred by a bankruptcy law provision that was designed, ironically, to minimize uncertainty in the securities markets.
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