Second Circuit -- In re: Bernard L. Madoff Inv. Sec. LLC

In re: Bernard L. Madoff Inv. Sec. LLC

The Dickensian-named ponzi windup continues.

Here, customers appealed a bankruptcy court ruling that the amount owed them should be determined by the amount of money they deposited with the scheme, not the amount of money in their statements (inflated by fictitious earnings).  First, the court holds that they are customers for purposes of the statute, as the monies were deposited for the purpose of investing in securities.  Second, the court ratified the 'net investment' method of calculating net equity, but limited its decision to extraordinary cases such as this where the books were so thoroughly and capriciously cooked.