On November 25, 2013, Law360 reporter Richard Vanderford's article entitled "Madoff Trustee Asks 2nd Circ. To Allow 6-Year Lookback" named BakerHostetler Partners David J. Sheehan, Oren J. Warshavsky, and Tracy Cole, and Associates Seanna Brown and Carrie Longstaff, as well as SIPA Trustee and BakerHostetler Partner Irving H. Picard.
The SIPA Trustee "…urged the Second Circuit on Friday to overturn a ruling that disallowed suits against so-called Madoff net-winners, arguing he deserves to be able to look back six years to decide who is a net winner," reported Mr. Vanderford. "A lower court judge made an error when he ruled that trustee Irving Picard could only look back two years to make that determination, Picard said in a brief to the appeals court. Picard would normally be allowed to look back six years — a period that would allow Picard to sue significantly more customers — but the lower court found the Madoff victims are protected by a section of bankruptcy law designed to prevent securities transactions from being unwound, and limited the lookback to two years."
The article referenced the ongoing issue in the case of Picard v. Ida Fishman Revocable Trust, case number 12-3585, in the U.S. Court of Appeals for the Second Circuit.
Vanderford continues to report that, "Picard said the law, known as Section 546(e), should not apply since Madoff's investment business was a Ponzi scheme and there are no actual securities transactions involved. 'Even where there is no risk to the securities markets — because no securities transactions were attempted or completed — the 'net winners' of BLMIS's fraud still get to keep their winnings, at the expense of their fellow customers,' Picard said. No courts have found that Section 546(e) applies when the customers merely think they own securities, Picard said."
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