Financial Times – The trustee charged with tracking down money for victims of Bernard Madoff’s alleged $50bn Ponzi scheme will target big investors – such as hedge funds – that pulled "substantial amounts" of "false profits" out of the broker’s operation.
Under federal and New York law, investors who withdrew either principal or profits in the 90 days before Mr Madoff’s December 11 arrest are particularly vulnerable to so-called "clawbacks", but the trustee will be able to reach back up to six years in some cases.
With billions in claims and only about $940m in recovered assets, Irving Picard, the trustee, must rely on money from investors who cashed out early as a source of restitution.
He and David Sheehan, a lawyer working with him, told a creditor meeting last week that they intended to focus on large investors, particularly if they had suspicions about Mr Madoff’s operation.
Mr Sheehan cited the example of "someone who may have been well informed and may have had red flags".