The US Court of Appeals for the Second Circuit issued a ruling yesterday which will significantly affect the way "investor losses " are handled by the Trustee going forward. The ruling, while unpopular uses a common-sensical approach when calculating losses.
Essentially , the ruling defines "investor losses" as the amount of cash the investor ACTUALLY LOST , not the fictitious amount set forth on their account statements over the years. This will further enhance the Trustee's ability to pursue "clawback suits " against many Madoff victims.
I understand that to a victim "who was sucked into this fairy-land world of high yields" it seems grossly unfair, but at the end of the day this ruling analyzes amount of cash in vs. amount of cash out...Plain and simple!
Tough ruling, especially in light of our current economic times...But the right one?
You be the judge.
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