|Beth Healy, Globe Staff|
A federal Appeals Court on Monday blocked the trustee overseeing the Bernard Madoff bankruptcy case from reaching far back in time to recoup money that can be repaid to victims of the massive Ponzi scheme.
The decision is a victory for those who made money investing with Madoff and feel they should not have to give up profits they did not know were improper.
But it was a setback for others who lost money on Madoff investments, and will not gain access to the
“The court’s ruling sharply restricts the trustee’s litigation campaign against innocent victims of Madoff’s fraud,’’ said
Madoff pleaded guilty in 2009 to a scheme in which he stole
The court decision may benefit
Also listed as a defendant in the appeal is Thomas H.
A lawyer for
Secretary of State
“What kind of precedent does that set?’’ Galvin said. “It now gets harder for anyone trying to recover money from a Ponzi scheme.’’
Galvin’s office is working on the alleged
As a practical matter, the ruling appears not to have an impact on the many large settlements the trustee has already forged with Madoff investors. A hedge fund group owned by
But the trustee is still pursuing other firms, alleging they knew or should have known about the fraud. They, too, could potentially benefit from Monday’s ruling.
“Certainly I’d be pretty happy if I were somebody being sued for bad faith,’’ Schwed said in an interview.
Picard and his team could appeal the decision to the
“The existence of a securities contract is not vitiated because a broker fails to make good on his commitment,’’ the decision said.
Picard so far has recouped
Madoff’s former operations director,
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