Conn. Judge Freezes Assets of Madoff Sons, 5 Hedge Fund Execs
Siding, for now, with a municipality suing over the loss of $42 million from its pension fund, a Connecticut judge has temporarily frozen the assets of Bernard Madoff’s wife, brother, two sons and five executives of hedge funds that funneled money into Madoff’s now-admitted Ponzi scheme (one of whom is a Madoff son-in-law).
Although the defendants in the civil suit have not been charged with any criminal wrongdoing, the civil suit filed by the town of Fairfield contends that they “knew—or willfully refused to know—that Madoff’s investment returns were not actually produced by his purported split-strike conversion strategy,” reports Reuters.
However, the litigation doesn’t accuse the defendants of knowingly sending money to Bernard Madoff’s $65 billion Ponzi scheme, writes the DealBook blog of the New York Times. “Rather, it contends that the managers believed Mr. Madoff was front-running, using his inside knowledge of orders coming through his brokerage firm to reap illegal profits for his money-management business.”
In an order yesterday, Connecticut Superior Court Judge Arthur Hiller froze the assets of the three Madoff relatives and five executives until April 13, when another hearing will be held. The suit, which was filed on behalf of the municipality by attorney David Golub, contends that the town is likely to win $75 million at trial and seeks to prevent the defendants from dissipating assets that could be used to satisfy such a judgment, reports the Connecticut Post.
Madoff’s sons, Mark and Andrew, worked for his securities business; his brother, Peter, a lawyer, was chief compliance officer.
Defendants and their lawyers either declined to comment or could not be reached, reports a Wall Street Journal (sub. req.) article on the asset freeze.
Related coverage:
ABAJournal.com: “Brooklyn Law Student Wins Freeze on Madoff Brother’s Assets”
Last updated at 9:25 p.m. to include DealBook coverage.
