Infuriating: No Asset Freeze For Fairfield Greenwich

Fairfield Greenwich and its partners are free to establish their own Swiss banks, stuff safety deposit boxes with Krugerrands and snap up German bearer bonds, as a judge denied a victims’ request to have their assets frozen.

The jduge apparently bought into Fairfield’s logic

“Plaintiff’s attempt to seek redress for the Madoff fraud from defendants, who are themselves victims of the fraud, fails to even state a claim, much less demonstrate a likelihood of success on the merits as is required for the extraordinary relief plaintiff seeks,” wrote Fairfield’s Simpson lawyers. “There is no fact cited as to when the Madoff Ponzi scheme started and what fees, if any, may have been paid with respect to assets that were misrepresented by Madoff. And even if there were, plaintiff’s conclusory and non-specific allegations of insufficient diligence by the defendants–and apparently by all who did diligence on Madoff or investigated him, including the United States Securities and Exchange Commission–do not state causes of action.”

Stunning. They’ve convinced at least one judge that they’re victims just like anyone else, and that they might’ve really amassed their wealth legitimately. Of course there will be way more lawsuits, and if the truth emerges about ignored red flags and a failure to do stated due diligence, we think the criminal courts will get involved. Still, infuriating.

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