UK court dismisses action against Madoff directors

  • @ArmitageJim

A High Court judge yesterday dismissed fraud claims brought by liquidators of fraudster Bernard Madoff’s UK operations against its directors and harshly condemned the distress the prosecution had caused them.

Madoff’s son Andrew was among those cleared, as well as his late son Mark, who committed suicide in 2010. The London division’s chief executive, Stephen Raven, and Madoff’s long-time associate, Sonja Kohn, were also among those cleared in the judgment.

The charges surrounded payments of millions of dollars from the London company to Ms Kohn and for luxury items for Madoff including a yacht and an Aston Martin.

Ms Kohn introduced new clients to the firm and provided research and advice. She was paid a total of $59m (£36m). Although the claimants acknowledged her introductions led to new customers investing about $9bn to Madoff’s funds, they said she wrongfully received payment. Mr Justice Popplewell, however, cleared all the defendants on all charges, finding that they had acted appropriately with regards to the business.

He criticised the prosecution for having pursued the case “aggressively and relentlessly over several years, on occasion with an unfair degree of hyperbole.”

He concluded: “Madoff’s fraud itself blighted [the defendants’] lives and tainted their good names simply by association... To this was added the burden of this unfounded claim, making serious allegations of dishonesty, which threatened financial ruin and personal humiliation.”

David Archer, solicitor for Andrew Madoff (who is ill with cancer) and Mark Madoff’s estate, said: “Andrew Madoff and his family are pleased that after a thorough review of all the facts, justice has been served.”

The liquidators of Madoff’s UK firm issued a statement saying that they were “extremely disappointed” and were considering their position.