Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
Claims Dismissed Against Andrew Madoff and Estate of Mark Madoff
- Client News
- October 18, 2013
Practices
As has been reported by The New York Times, Paul, Weiss achieved a significant victory for our clients Andrew Madoff and the Estate of Mark Madoff. Following a three-week trial in the U.K., Justice Popplewell of the High Court of Justice, Queens Bench Division, Commercial Court issued a 188-page decision dismissing all claims against our clients brought by the Securities Investor Protection Act Trustee on behalf of Bernard L. Madoff Investment Securities (BLMIS) in conjunction with the liquidators of Bernard Madoff's London business, Madoff Securities International Ltd. The claimants alleged that our clients and six other directors of MSIL violated their fiduciary duties to act in the best interest of MSIL when they approved several sets of payments by MSIL to various third parties, including Sonja Kohn.
The court found that neither Andrew nor Mark "knew of, or suspected the fraud." They were "never privy" to BLMIS' fraudulent investment advisory business and "never saw any records of transactions for the investment advisory business." Andrew and Mark managed the market making and proprietary trading divisions of BLMIS, which, according to the court, conducted "legitimate and profitable business activities." The court found that both Andrew and Mark exercised their duties with reasonable care and skill. The court concluded that "an honest and intelligent man in the position of each brother could reasonably have believed that the payments were in the interests of the company."
The court condemned the trustee's "poisonous press releases" related to this case and acknowledged the immense "stress imposed on...Andrew Madoff, seriously ill with cancer, and his and his brother's families" by these proceedings. The court praised the "resolute and temperate way they [and the other defendants] have conducted themselves" and concluded that "[t]heir honesty and integrity has been vindicated."
The Paul, Weiss team, which supported U.K. counsel in trying the case, included litigation partners Martin Flumenbaum and Andrew Ehrlich.