Wednesday, December 17, 2008

This is Very Disturbing to Me

Among the plethora of disturbing things that seem to keep coming at us regularly these days. An excerpt from a Reuters article regarding the Madoff scandal:
Even investors who managed to pull their funds out of Madoff's firm two years ago, or more, may have to return money, said Jeff Marwil, a partner at law firm Winston & Strawn, which is representing a group of Madoff investors.
"It's about the equalization of harm," Marwil said.
Under U.S. bankruptcy code, investors that pulled money out of a fraudulent fund up to two years before it went under must give their money back, if they knew or should have known the fund was bogus, Winston & Strawn's Marwil said. And state law typically broadens that window to four to six years.
Marwil, who is representing the bankrupt Bayou Group of hedge funds, successfully took back funds from investors that had withdrawn money years before Bayou went under.
"Our view was there were sufficient red flags for any investor to know there was a problem at Bayou. I think a similar argument could be made here," Marwil said.
So my question is…how in god's name can you possibly argue that someone who was smart enough to pull money out of something (hence the "should have known" part of it) should in ANY WAY be responsible for helping out those who also "should have known".
Although I don't know why I'm at all surprised by this, when you consider that we've all been required to participate in the "equalization of harm" with the bailouts to the banks, homeowners and possibly the auto industry.
I may as well go live in Europe at this point. Oh wait, that's right…I am!! :-)

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