Hedge funds scammed by Madoff won't get payments
Customers of hedge funds – or so-called 'feeder funds' – that invested with Madoff don't qualify for a settlement fund, a federal judge affirms. Thousands of clients of 16 hedge funds hoped to collect from the $500,000 fund.
Bernard Madoff walks back to his apartment in New York in this 2008 file photo. A federal judge has affirmed that clients of 16 hedge funds that had invested with Madoff don't qualify for payments from a special reimbursement fund. Mr. Madoff is serving a 150-year prison sentence for his Ponzi scheme.
Shannon Stapleton/Reuters/File
NEW YORK
A federal judge has affirmed a bankruptcy court ruling that thousands of clients of funds that invested money with jailed financier Bernard Madoff do not qualify for payouts that reimburse Madoff customers.
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The decision made public Thursday by Judge Denise Cote (koht) agreed with a judge's finding last year. It said the clients don't qualify because they did not hold accounts in their names.
It means investors still cannot recover up to $500,000 from a fund created to reimburse small investors who are victims of fraudulent schemes.
The ruling came in a case brought on behalf of 16 feeder or hedge funds that invested with Madoff.
Lawyers for the funds did not immediately return messages seeking comment.
Madoff is serving a 150-year prison sentence for masterminding the multibillion-dollar Ponzi scheme.
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