The release of a report by the Securities and Exchange Commission regarding the agency’s own negligence in stopping Bernard Madoff before he was able to fleece investors out of billions could prompt a difficult legal battle, according to Reuters. Lawyers agree that the SEC, along with any other government agency, is a supremely difficult target for lawsuits, given the concept of “sovereign immunity,” which generally protects the government from lawsuits that pose “interference.” Although the 457-page report released last week concluded that SEC officers in fact missed indicators that Madoff was operating a $65 billion Ponzi scheme, legal experts agree that a class action case would be an uphill battle.
Madoff Victims May Attempt SEC Suit
A class action suit against the SEC for its mishandling of the Madoff scheme could be possible–but would be a difficult exercise for the plaintiffs.
September 9, 2009