In an opinion yesterday, Judge Batts dismissed claims by investors in a Madoff feeder fund against the fund’s managers and auditors because, under the law of the British Virgin Islands (where the funds were organized), only the fund had standing to assert the claims. If fact, she noted, similar claims against the same defendants are being pursued by the fund itself in BVI liquidation proceedings:
Continue Reading Judge Batts: Investors in Madoff Feeder Fund Lack Standing to Sue Fund Managers and Auditors

In an opinon issued yesterday, Judge Griesa reinstated state law fraud claims of investors in so-called Madoff “feeder funds” that he had previously dismissed under the Securities Litigation Uniform Standards Act (SLUSA). SLUSA bars large class actions brought under state law that allege “a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security.” A “covered security” is defined as, among other things, a security traded on a national stock exchange. In a prior decision, Judge Griesa had held that SLUSA barred plaintiffs state law claims even though their own investments were not in “covered securities” but in funds that invested with Madoff. Madoff’s subsequent purported transactions in covered securities was sufficient for SLUSA to apply and bar any claims based on Madoff’s fraud. Plaintiffs moved to reinstate their state law claims after the Supreme Court ruled in Chadbourne & Parke LLP v. Troice, 134 S. Ct. 1058 (2014). Judge Griesa agreed that Troice had changed the landscape:
Continue Reading Judge Griesa Reinstates Claims of Madoff Feeder Fund Investors After Recent Supreme Court Decision on SLUSA

In an opinion issued today, Judge Engelmayer dismissed a putative class action lawsuit brought against rating agency Standard & Poor’s for allegedly fraudulent misstatements contained in its ratings of Fannie Mae preferred stock. The plaintiffs had alleged that S&P’s high ratings of the stock had induced them to buy. Judge Engelmayer dismissed the plaintiffs’ state law securities fraud, common law fraud and negligent misrepresentation claims under SLUSA.
Continue Reading Judge Engelemayer Dismisses Putative Class Action Against S&P on SLUSA, Other Grounds