On June 20, 2013, the U.S. Court of Appeals for the Second Circuit held that the trustee for Bernard L. Madoff Investment Securities (BLMIS) does not have standing to assert common law claims for damages on behalf of Madoff’s customers and cannot seek contribution for payments made to satisfy customers’ net equity claims under the Securities Investor Protection Act (SIPA). Based on its ruling, the Second Circuit affirmed the dismissal of claims against HSBC, JPMorgan Chase, UBS and UniCredit S.p.A relating to Madoff’s massive Ponzi scheme. Our firm represented HSBC before the district court and on appeal. The Second Circuit’s ruling confirms that SIPA does not authorize the trustee for a liquidating broker-dealer to assert claims that belong to the broker-dealer’s customers and other creditors, consistent with well-established rules applicable to trustees in ordinary bankruptcy cases.
