Circuit Rejects Madoff Victims’ Attempt to Use RICO Statute


"An attempt by investors to recoup losses from their investments in Bernard Madoff’s massive Ponzi scheme by suing JPMorgan Chase under the Racketeer Influenced and Corrupt Organizations Act has been rebuffed by the U.S. Court of Appeals for the Second Circuit," reports the New York Law Journal.

"MLSMK Investment Co., which lost $12.8 million in the scandal, claimed that JPMorgan Chase had suspicions about Madoff’s activities but failed to freeze his bank accounts because it wanted to continue receiving substantial fees from his market making and banking activity.

"Yesterday, in deciding an issue of first impression, the Second Circuit held that MLSMK’s RICO claim was precluded by §107 of the Private Securities Litigation Reform Act, 18 U.S.C. §1964, as the court adopted a restrictive analysis on the bar against RICO actions in securities cases."

The claim was precluded because not enough of the JPMorgan people had a vowel at the end of their name.

See our other post on this.

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