On August 3, 2011, American Lawyer columnist Susan Beck reported on Judge Rakoff’s District Circuit Court decision in Picard v. HSBC, explaining that the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC, Baker Hostetler Partner Irving H. Picard, should have legal standing to bring suits against large financial institutions on behalf of Madoff’s victims.
Beck mentioned that in earlier columns, she “urged the courts not to block Picard’s claims on standing grounds, and to evaluate his cases on the merits” as making Madoff’s victims sue the large financial institutions they feel were implicit in Madoff’s scheme would be an unfair burden, a “scattershot” approach” and not the best use of judicial resources.
She went on to cite the minority opinion in the Supreme Court’s 1972 ruling in Caplin v. Marine Midland Grace Trust which stated, “Today’s decision reflects a misunderstanding of the important role which a [bankruptcy] reorganization trustee…is supposed to perform.” Beck also explained that the opinion noted, “It’s not a sensible option to rely on investors to bring their own suits against third parties.”