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Madoff's Sons Cleared by U.K. Judge

Date: Tuesday, October 22, 2013
Author: Advisor.ca

This past weekend, a British judge cleared Bernard Madoff’s sons of wrongdoing regarding a case brought against the men by the liquidator of their father’s estate in Britain.

Read: Madoff saga takes new twist in U.K.

Judge Andrew Popplewell ruled the brothers, Mark and Andrew, were among several U.K. directors of Bernard Madoff’s London-based securities firm.

However, though their reputations had been tainted by association, he dismissed the civil case against the brothers. He delivered a glowing endorsement of their characters, saying, “Their honesty and integrity has been vindicated.”

Mark and Andrew Madoff long played a lead role in the drama surrounding their disgraced financier father. They first alerted authorities in 2008 after the elder Madoff confessed his highly regarded investment business was nothing more than a Ponzi scheme.

Though the pair then held their silence as the details of the breathtaking fraud came out, Andrew spoke to the press after his brother’s death in 2010 and ahead of the release of a book telling the Madoff family’s side of the story.

That book says the Madoff family had been completely hoodwinked by Bernard.

Nevertheless, suspicion had lingered and a lawsuit was filed in London’s High Court against the Madoff brothers and various company directors.

It was alleged the brothers subverted the company’s finances by: approving $27 million in payments; more than €5 million in perks; and millions more in interest parceled out to well-connected Austrian businesswoman Sonja Kohn.

But Judge Popplewell ruled the Madoff brothers and another director, Philip Toop, “were [only] in breach of their duty to exercise reasonable skill and care” by failing to investigate whether the payments were in the company’s best interests.

He concluded the payments would most likely have been made in any case, and his judgment was a big win for the defence.

“The resolute and temperate way they have conducted themselves in these proceedings does them great credit,” the judge added.

Meanwhile, the New York trial of five of Bernard Madoff’s ex-employees kicked off today with the testimony of the FBI agent who arrested Madoff.

Agent Theodore Cacioppi was brought in to detail the arrest and the events before.

Opening statements were made last week for the current trial, and months of testimony are expected from this point forward.

The ex-workers are accused of helping Madoff cheat thousands of investors, but their attorneys say they were duped just like the clients.