Making Banks Pay for Madoff’s Fraud

by RitaZhao on April 27, 2011

in Articles, Diaz Reus News, Financial Fraud

Risk Management   April 4, 2011

The impact of Bernard Madoff’s $18 billion Ponzi scheme will be felt for a long time to come. With Madoff in prison, his assets seized and sold, lawyers for his victims must now turn to other sources to make their clients whole. Enter the banks.

Madoff handled billions of dollars. Those funds came from many unsuspecting individual and institutional investors, and were funneled through a maze of accounts spanning the globe. Even if government regulators were asleep at the switch, it is difficult to believe that all of the many financial institutions that handled Madoff’s money were oblivious to what this fraudster was doing. At least that is how lawyers representing defrauded investors see the situation. To them, the financial institutions that Madoff used as part of his scheme have become a piggy bank from which they will recover their client’s losses. And federal law is providing these lawyers with plenty of ammunition.

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