Power of Story Send a Tweet        
OpEdNews Op Eds

Discursive Comments On The Oral Argument In The Court of Appeals In The Madoff Case On March 3, 2011. Part 4

By       Message Lawrence Velvel       (Page 1 of 3 pages)     Permalink

Related Topic(s): ; , Add Tags  Add to My Group(s)

View Ratings | Rate It

opednews.com

Author 2556
- Advertisement -

April 1, 2011

 

Discursive Comments On The Oral Argument In The Court of Appeals

  In The Madoff Case On March 3, 2011.

- Advertisement -

 

PART 4

 

- Advertisement -

 

            The final opponent to argue was Michael Conley of the SEC.

 

            At inception Judge Jacobs asked him to distinguish the SEC's position, to the extent it is distinguishable, from the position of SIPC or the Trustee.   Conley replied that the SEC is in agreement with them with regard to whether you look solely at the account statement or to all the books and records, but believes you must value the net equity claim in "constant dollars."   (Tr. 63.)   The Bankruptcy Court, he said, decided to consider the constant dollar issue after the "initial determination" of net equity is made.   (Tr. 63.)   Thus, in the words of Justice Leval's question, "that issue of the constant dollars or the inflation adjusted dollars is not before us now."   (Tr. 64.)   It could be something to subsequently be decided below depending on how the Circuit rules, but it has not been briefed or decided and the Court is not called upon to decide it now.  

 

            Conley then reiterated the oft-made point that the Trustee must "discharge all obligations" of Madoff to a customer and said "that's exactly what the Trustee did" here after an extensive investigation.   (Tr. 65.)   In so saying, Conley was necessarily adopting the position, first advanced by Sheehan, that Madoff had no "obligation" to pay victims the fake profits that his own statements showed he owed them (and which Sheehan ultimately admitted would be recoverable in a fraud suit).   It strikes me that it is nothing short of amazing for the SEC -- which was created to protect investors -- to take the position -- deeply injurious to investors -- that the crook does not owe investors what the statements he gave them showed they were owed (and what Madoff did give to people who closed out their accounts).   For the agency created to protect investors to instead injure them in this way is further evidence of what has now been known for over two years:   the SEC has abdicated its responsibilities, is incompetent, and is completely under the thumb of SIPC instead of supervising it as Congress intended.   It is completely understandable that some people -- actually quite a few people, I believe -- think that Mary Schapiro, on whose watch this position was taken, should be dismissed.

- Advertisement -

 

            None of this came up in the argument, however.

 

Next Page  1  |  2  |  3

 

- Advertisement -

View Ratings | Rate It

opednews.com

Lawrence R. Velvel is a cofounder and the Dean of the Massachusetts School of Law, and is the founder of the American College of History and Legal Studies.

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon Share Author on Social Media   Go To Commenting

The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Related Topic(s): ; , Add Tags
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Preliminary Memorandum of the Justice Robert H. Jackson Conference on Federal Prosecutions of War Criminals

Investing With Bernie Madoff: How It Happened, What Happened, What Might Be Done (Part I)

Irving Picard's Three Percent Commission In The Madoff Case.

Alan Dershowitz on Whether to Prosecute Executive Branch Criminals

Madoff And The Mafia: A Mere Speculation Or Almost A Sure Thing?

It Appears That The Madoff Scam Was Not, Repeat Not, A Ponzi Scheme.