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Administration September 24, 2010
Foundation Faults SEC in Madoff Scam
September 24, 2010 (PLANSPONSOR.com) – A charitable foundation stung by Bernie Madoff has flung a litigation gauntlet at the feet of an unlikely defendant; the Securities and Exchange Commission (SEC).
Reported by Nevin E. Adams
According to published reports, the New Hyde Park, New York-based Litwin Foundation has sued the SEC for “negligence” in failing to uncover the $65 billion Ponzi scheme perpetrated by Bernard Madoff. According to Bloomberg, the foundation seeks to recover at least $19 million and other unspecified damages against the agency for failing to prevent losses at Madoff’s investment firm.
The SEC “had countless opportunities to stop the Ponzi scheme Madoff operated over 16 years and botched all of them,” the foundation said in the complaint. “The SEC failed to do so because the assigned staff committed numerous negligent, non-discretionary acts and inactions due chiefly to their inexperience, incompetence, bureaucratic pettiness, laziness, inattentiveness, and an agency culture of deference to powerful industry figures,” the foundation said in the complaint.
The government’s “sovereign immunity” from lawsuits should be waived under a law that allows cases to be brought against the U.S. if its workers were negligent, the foundation said in the complaint, according to Bloomberg.
The Litwin Foundation was established in 1989 and contributes to nonprofits that include Lincoln Center for the Performing Arts and the Brooklyn Botanical Garden. Madoff, 72, is of course serving a 150-year sentence for running the fraud.
The case is The Litwin Foundation v. United States of America, 10-CV-7367, Southern District of New York (Manhattan).