Lax & Neville, LLP, has been retained by investors who lost money in MAT Five, which was inappropriately sold and marketed by Citigroup. The MAT Five was promoted to fixed-income investors who were seeking preservation of capital. In reality, the MAT Five was a very risky investment, which could drop sharply if the markets changed, or if the investments maintained in the MAT Five were not properly managed. Due to the very risky nature of the investment, the MAT Five plummeted in value. Many investors have been significantly damaged as a result of the inappropriate marketing and selling of the MAT Five by Citigroup. If you have lost money investing in the MAT Five or have information about Citigroup's marketing of the MAT Five, please call Lax & Neville, LLP, (212) 696-1999.
Lax & Neville, LLP will be initiating litigation against the Securities and Exchange Commission (“SEC”) on behalf of Madoff victims seeking monetary damages for negligence under the Federal Tort Claims Act. Based upon the Inspector General’s Report, we believe that a viable claim exists against the SEC. Please see link below.
Inspector General's Report Regarding SEC Investigation of Madoff
Army Corps of Engineers Liable Under FTCA
If you have any questions regarding this matter, please contact our firm at (212) 696-1999.
On June 5, 2009, our firm filed a class action adversarial proceeding in the United States Bankruptcy Court for the Southern District of New York seeking to obtain a declaratory judgment, pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, et seq., (i) that the Trustee’s definition of “net equity” is incorrect as a matter of law, and (ii) that a customer’s “net equity” under SIPA is the value of the securities reflected in the customer’s Madoff account as of the SIPA filing date (even where the securities were never actually purchased) less any amounts the customer owes to Madoff.
First and foremost, the Trustee/SIPC Approach is an unlawful contravention of SIPA that deprives innocent victims of their SIPC recovery. It is also unprecedented. We are aware of no case in the history of SIPA where customers, who have been provided with written confirmations and account statements reflecting purchases and holdings of real securities (e.g., IBM, AT&T, etc.), had their “net equity” claims determined on the basis of the cash in, cash out approach being used by the Trustee and SIPC in this case. Indeed, in January of this year, SIPC President Stephen Harbeck acknowledged that, for this one case, SIPC took the extraordinary step of modifying the standard SIPC claim form used over the past 39 years. That form, which simply asks for the information required under the SIPA Definition (namely, what the debtor owes the customer and what the customer owes the debtor as of the filing date), was changed to ask for the customer’s total deposits and total withdrawals (for what could be decades). Neither the Trustee nor SIPC has set forth any statutory basis for this departure from the SIPA Definition of “net equity” and past practice, and there is none.
Second, these adversely affected investors are not seeking a bail out from the government. SIPC was designed essentially as an insurance policy for investors defrauded by broker/dealers. The funding associated with these duly authorized SIPC payouts would come from SIPC funds, which are comprised of the yearly registration fee paid in by registered broker/dealers. Just recently, SIPC reviewed and increased its membership due’s formula and has authorized increased contributions. Broker/Dealer registration in SIPC is voluntary, and contrary to the assertion made in the Times article, there are excellent alternatives other than taxpayers footing the bill for these payouts. SIPC could borrow the funds, increase membership dues, and seek retroactive contributions from its members.
In sum, this class action seeks a declaration by the Court on the definition of “net equity.” We feel that our position is strongly supported by the law, and is supported by the policy arguments originally offered when SIPA was enacted.
If you have any questions regarding these matters, please contact either myself or partners Barry Lax and Brian Neville at (212) 696-1999.
Madoff Class Action Adv. Pro. No. 09-1265(BRL)
Letter to SEC regarding SIPC Claims
Lax & Neville is currently acting on behalf of a group of approximately 300 investors called MadoffSurvivors, and represents many of its members. Brian Neville has been selected to head the legal steering committee, and is currently forming a legal strategy session for all attorneys involved, as well as congressional members who may help. The MadoffSurvivors exemplify the true victims of the Madoff ponzi scheme. They are individuals and families who worked their lifetimes to attain a modest nest egg for their retirement that was abruptly stolen from them on December 11, 2008.
If you are a victim of this fraud, and invested directly with Bernard L. Madoff Investment Securities LLC, and would like to retain Lax & Neville, LLP to file a SIPC Claim on your behalf, please call Lax & Neville, LLP, (212) 696-1999.
Lax & Neville, LLP, has been retained by investors who lost money in the Aravali Fund, which was inappropriately sold by Deutsche Bank Securities and other brokerage firms in 2006 and 2007. The Aravali Fund was sold to investors who were seeking income and safety of principal as an alternative to a portfolio of municipal bonds. In reality, the Aravali Fund was a very risky interest arbitrage scheme comprised of a significant short position in treasury bonds, interest rate swaps and a highly levered pool of relatively illiquid municipal bonds. Not long after inception, due to the very risky nature of the investment, the Aravali Fund plummeted in excess of 90% in value, and is now being liquidated. Many investors have been significantly damaged as a result of the inappropriate marketing and selling of the Aravali Fund. Indeed, at least one Deutsche Bank broker who sold the Aravali Fund has claimed that it was misrepresented to him by Deutsche Bank. If you have lost money investing in the Aravali Fund or have information about Deutsche Bank's marketing of the Aravali Fund, please call Lax & Neville, LLP, (212) 696-1999.
"LEHMAN PRINCIPAL PROTECTED NOTES"
Lax & Neville, LLP, has been retained by investors who lost money in Lehman Brothers Principal Protected Notes ("Lehman Principal Protected Notes"), which were inappropriately sold and marketed by several brokerage firms, including Lehman Brothers, Citigroup, UBS, Merrill Lynch and Wachovia. The Lehman Principal Protected Notes were marketed and sold as low-risk, conservative structured investment products to investors who were seeking income with capital preservation. Investors were advised that Lehman Principal Protected Notes would provide preservation of capital, a modest yield, and a slight gain in principal. Indeed, a brochure issued by Lehman Brothers and others, and distributed by the selling and marketing firms to their clients, stated that their "structured notes", which includes Lehman Principal Protected Notes, had "100 percent principal protection" and "uncapped appreciation potential" based upon the gains in the S&P 500 Index. However, in reality, the investments in Lehman Principal Protected Notes were subject to a significant amount of risk, including the risk of complete loss of the entire investment.
If you have lost money investing in Lehman Principal Protected Notes or principal protected note or structured products issued by another brokerage firm, or have information about the marketing of Lehman Principal Protected Notes or principal protected note or structured products issues by another brokerage firm, please call Lax & Neville, LLP, (212) 696-1999.
