Even innocent investors who get caught up in a Ponzi scheme can still be seen as having taken "other people's money" if they withdraw their funds before the scheme collapses.
"Clawback" lawsuits, which arise after a company or fund collapses, are attempts to seize illicit profits or withdrawals made by an investor.
A Ponzi scheme works by paying investors with money from new clients. When investors withdrew funds from "feeder funds" such as Fairfield Sentry, they were paid with other investors' money.
Fairfield Sentry's liquidators are trying to recover those early redemption payments to service claims against the fund arising from its liquidation in a "just, fair and equitable" manner.
Irving Picard's suits have focused on banks that gained fees through advising clients and creating investment products based on Bernard Madoff's fraudulent scheme, but have the same purpose: reducing the losses made by investors by reclaiming profits claimed by banks.
However, Mr Picard's ability to file new cases is limited by a two-year time limit following the initial filing of bankruptcy proceedings. On the other hand, because Fairfield Sentry filed for bankruptcy in the British Virgin Islands it is not bound by the same statute of limitations and could file further suits.
The fund's liquidators expect they will be granted at least the same amount of time to file as Mr Picard.
However, the Fairfield Sentry clawback case may ultimately hinge on whether it is ruled in other cases that the people directing investment to the Madoff fund were aware that his scheme was a fraud.
"It does strike me as very odd that they would have a legal basis to be putting money in, not in good faith, and to take it out, in good faith," said one lawyer, who asked not to be named.
ghunter@thenational.ae
INDIA SQUADS
India squad for third Test against Sri Lanka
Virat Kohli (capt), Murali Vijay, Lokesh Rahul, Shikhar Dhawan, Cheteshwar Pujara, Ajinkya Rahane, Rohit Sharma, Wriddhiman Saha, Ravichandran Ashwin, Ravindra Jadeja, Kuldeep Yadav, Mohammed Shami, Umesh Yadav, Ishant Sharma, Vijay Shankar
India squad for ODI series against Sri Lanka
Rohit Sharma (capt), Shikhar Dhawan, Ajinkya Rahane, Shreyas Iyer, Manish Pandey, Kedar Jadhav, Dinesh Karthik, Mahendra Singh Dhoni, Hardik Pandya, Axar Patel, Kuldeep Yadav, Yuzvendra Chahal, Jasprit Bumrah, Bhuvneshwar Kumar, Siddarth Kaul
Company%20Profile
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Indoor cricket in a nutshell
Indoor Cricket World Cup - Sep 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
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Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
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Farasan Boat: 128km Away from Anchorage
Director: Mowaffaq Alobaid
Stars: Abdulaziz Almadhi, Mohammed Al Akkasi, Ali Al Suhaibani
Rating: 4/5
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Killing of Qassem Suleimani