Federal judge moves to protect Madoff assets from bankruptcy creditors

[JURIST] Judge Denny Chin of the US District Court for the Southern District of New York [official website] issued a restraining order Monday that protects from bankruptcy more than $100 million in assets of financier Bernard Madoff [JURIST news archive]. Chin signed the order to protect assets that will likely be forfeited [AP report] by Madoff to the US government as a result of his guilty plea to securities fraud charges [complaint, PDF; JURIST report] stemming from his alleged multi-billion dollar Ponzi scheme. The order comes on the same day that a federal bankruptcy judge appointed an interim trustee [Bloomberg report] to oversee Madoff's assets ahead of attempts by injured investors to recoup losses suffered in the scheme. Madoff remains in custody following his plea.

Last month, Madoff pleaded guilty [JURIST report] to security fraud charges for his alleged involvement in a multi-billion dollar Ponzi scheme. In February, Madoff consented [JURIST report] to a partial judgment [SEC press release] with the SEC over civil charges brought by the SEC to obtain a preliminary injunction and asset freeze against him. The same day, then-SEC Division of Enforcement Director Linda Thomsen announced she was stepping down from her post [SEC press release]. In the week following Madoff's charges, then-SEC Chairman Christopher Cox [official profile] said that he would launch an immediate investigation [press release; JURIST report] into how the fraud allegedly perpetrated by Madoff went undetected for so long.

 

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