- Madoff Trustee Sues Lion Global Investors Ltd and at least six other companies

Madoff Trustee Sues Lion Global Investors Ltd and at least six other companies

Written by Wilfred Ling

Saturday, 20 August 2011

Irving Picard, the liquidator and trustee of the famous Madoff’s Ponzi firm sued Lion Global Investors Ltd and at least six other companies to recover at least US$172.8 million they allegedly received from investments made with Fairfield Sentry Ltd.

Bernard Madoff ran the largest Ponzi scheme in history. Investigators believe the fraud began as early as the 1970s. It is estimated that the amount missing from client accounts, including fabricated gains, was almost US$65 billion. The court-appointed trustee estimated actual losses to investors of $18 billion. On June 29, 2009, Madoff was sentenced to 150 years in prison, the maximum allowed.

Recently, the federal appeals court in New York said that trustee Irving Picard can calculate losses by subtracting the amount withdrawn from an investor’s account from the total placed with Madoff, the so-called net investment method. The ruling limits the number of victims who can claim money from the fund Picard oversees and reduces the amount of many eligible claims.

Fairfield Sentry fund was sold through private banking channels to accredited investors in Singapore. However, one of Great Eastern Group's GreatLink funds, the GreatLink Lion Global Flexi Fund, feeds into LionGlobal Flexi Fund. The latter is managed by Lion Global Investors Limited and it has an investment of approximately S$350,000 in the Fairfield Sentry fund. This investment represents less than 1.5% of the LionGlobal Flexi Fund's portfolio as at 11 December 2008. The LionGlobal Flexi Fund is also available as a standalone unit trust for retail investors. The potential impact to retail investors in Singapore appears to be minimal because the LionGlobal Flexi Fund is diversified.

Separately, the owners of the New York Mets professional baseball team were sued by the trustee of the ponzi scheme to return a whopping US$1 billion consisting of US$300 million fictitious profit plus US$700 million principal. As a result of this, and to deal with other financial issues, the owners had agreed to sell a minority share of the baseball team to David Einhorn, a hedge fund manager and longtime Mets fan.

Sources:

http://www.bloomberg.com/news/2011-08-19/madoff-trustee-sues-lion-global-6-firms-seeking-172-million-recovery.html
http://en.wikipedia.org/wiki/Bernard_Madoff
http://www.lifeisgreat.com.sg/en/jsp/corporate/mediarelease/2008/dec17.jsp
http://au.oztips.yahoo.com/news/article/-/10077052/us-judge-to-rule-by-sept-on-madoff-mets-owners-suit/
http://www.nytimes.com/2011/05/27/sports/baseball/hedge-fund-manager-david-einhorn-negotiating-stake-in-mets.html

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