So, to reiterate, I think Helen Chaitman was exactly right in saying she would be able to prove various claims through discovery. But then a funny thing happened on the way to the forum (so to speak). In early July, Chaitman proposed a rapid briefing schedule to the court, a schedule that left no time for discovery. It would be my speculation this likely was done for two reasons. One would be that she has clients, and there are also scores, hundreds or even thousands of others, who are hurting so badly that they had to get money from SIPC as quickly as possible; they cannot abide the delay that will be caused by discovery. I would estimate that the delay could be as long as six months or even a year. Lawyers make discovery a painful and time consuming process by a host of infamous stratagems, and that is what one could expect here from SIPC.
The other reason, I would speculate, is that Chaitman likely thinks the case against the Picardian/SIPCian version of net equity is so strong as what lawyers call a matter of law -- is so strong based on the legislative history, congressional motivations, past SIPC practice and pronouncements, and the New Times case -- that discovery is not needed to win, so let's have the issue decided as soon as possible.
Now, I don't really disagree with such assessment of the strength of the case, even though I recognize that certitude about the rightness of one's own side of a case is forever an occupational hazard of lawyers (not to mention clients). Nonetheless, while I don't disagree with the assessment of strength here, I do think it a major mistake to try to elide discovery. For, as indicated, I think discovery is going to hammer nail after nail in SIPC's coffin, is going to show that a desire to escape huge payouts and brokerage industry wrath, not principle or justice or congressional intent, was the driving force behind the adoption of cash in/cash out. And, even though our side of the case is already very strong, you always want to have all the powerful facts you can adduce in order to fare as well as possible before trial courts and courts of appeal. Discovery will produce those facts -- I think discovery might even produce facts that could even cause SIPC's purported legal position to be looked at derisively by the courts. Derision is deadly.
It turns out that just a few days ago, I am informed, Judge Lifland rejected the rapid briefing schedule proposed by Chaitman. I do not know why he did so, and some of the potential reasons which come to mind are not happy ones. But be this as it may, I would urge all the lawyers -- Brian Neville, Jonathan Landers and Helen Chaitman to demand discovery in this case. Just as I urged people not to forget the impact of net equity on recovery from the estate as well as from SIPC, so too I would urge people to be cognizant of the benefits that can wrought for our side by discovery, and the possible havoc it might wreak on the SIPCian/Picardian side. The results of discovery at least in my judgment, are likely to be very favorable to us, since I believe the cash in/cash out net equity position was used in Madoff -- but not with regard to people who thought they had bought securities which existed in the real world in New Times -- strictly in an effort to avoid massive payouts in Madoff.*
* This posting represents the personal views of Lawrence R. Velvel. If you wish to comment on the post, on the general topic of the post, you can, if you wish, email me at Velvel@VelvelOnNationalAffairs.com.
VelvelOnNationalAffairs is now available as a podcast. To subscribe please visit VelvelOnNationalAffairs.com, and click on the link on the top left corner of the page. The podcasts can also be found on iTunes or at www.lrvelvel.libsyn.com
In addition, one hour long television book shows, shown on Comcast, on which Dean Velvel, interviews an author, one hour long television panel shows, also shown on Comcast, on which other MSL personnel interview experts about important subjects, conferences on historical and other important subjects held at MSL, and an MSL journal of important issues called The Long Term View, can all be accessed on the internet, including by video and audio. For TV shows go to: www.mslaw.edu/about_tv.htm; for conferences go to: www.mslawevents.com; for The Long Term View go to: www.mslaw.edu/about _LTV.htm.