Investors who have lost their money in what is alleged to be the world’s biggest financial fraud may also be made to repay any profits that they made to U.S. liquidators. Under a new bankruptcy ruling, any investors who withdrew cash from the hedge fund run by Bernard Madoff before the $50 billion fraud was discovered could be forced to return their original investment and any profits.
The ruling, which was made in October, will come as a devastating development to Walter Noel, 78, the billionaire whose own investment firm — Fairfield Greenwich — lost $7.3 billion in Madoff’s scheme.
As the victims began a batch of lawsuits against him, one financier who had invested his own clients’ money with Madoff committed suicide yesterday. Thierry de la Villehuchet, 65, the co-founder of Access International Advisors, a fund management company, killed himself in his Madison Avenue office after losing as much as $1.4 billion.
As the FBI and the Securities and Exchange Commission began to construct the world’s biggest fraud case against Madoff, a second class-action lawsuit was filed against Noel and Fairfield Greenwich.
The plaintiffs accuse Noel of failing to vet Madoff adequately. The Fairfield Greenwich founder had invested $7.3 billion of his own, his family and investors’ money. Noel’s role as a financier who introduced new clients to Madoff — through “feeder funds” such as Fairfield — is also under scrutiny by federal investigators.
While the financial cost to Noel is already public, the personal cost to the Manhattan socialite and his wife, Monica, has yet to emerge.