Path to Legal Nirvana

The sequel to a Ponzi scheme became a model. From Ponzi Regulation:

“Having failed abysmally in its original goal of making money for investors, Manhattan Fund functioned very effectively as a revenue generating vehicle for another group of people. It operated as a hedge fund for less than four years, but for well over a decade it led a twilight existence in the form of pots of money presided over by government-appointed lawyers. This second life functioned so well as a legal fee maker that it provided an alluring model for attorneys….

For lawyers with the connections to implement the Manhattan estate blueprint, the path to legal Nirvana was clear. What they needed to do was to get the receivership of a defunct fund with sizable assets to recoup – the more complicated the situation the better – and file for bankruptcy in a sympathetic court. Then they could engage in elaborate litigation at fabulous pay, with guaranteed tenure for a decade or more…..”

Numerous fraudsters created opportunities for this, leaving wrecked investment businesses in their wake. But none matched the grand wreckage obligingly provided by Bernard Madoff.

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