U.S. Sen. Frank Lautenberg’s family foundation is one of three plaintiffs in The Lautenberg Foundation v. Madoff, 09-Civ-00816.  The Lautenberg Plaintiffs had reportedly invested approximately $8.9 million in Bernard Madoff’s Ponzi scheme.  They seek to recover losses through their February 24, 2009 complaint against Bernard Madoff’s younger brother, Peter.  Although part of the complaint was dismissed by the Court’s September 9, 2009 Order and Opinion, four causes of action remain against Peter Madoff.   

These remaining causes of action are for Peter Madoff’s alleged: breach of a fiduciary duty; aiding and abetting a breach of fiduciary duty; negligence; and a supposed violation of Section 20(a) of the Securities Exchange Act of 1934.  Via their March 12, 2010 notice of motion, memorandum of law, statement of facts, etc., the Plaintiff’s moved under Fed. R. Civ. P. 56 for summary judgment on their Securities Exchange Act cause of action.  In the above-mentioned statement of facts, Plaintiffs asserted they sustained nearly $6.5 million in actual losses.

According to the Plaintiffs, a "Uniform Application For Investment Adviser Registration" filed with the SEC shows that both Peter and Bernard Madoff had been "control persons" at Bernard L. Madoff Investment Securities LLC ("BMIS").  As the highlighted excerpt from page twenty of this registration form could indicate, Peter Madoff might have been such a "control person" since 1969:

(Click On The Image To Read The Entire Registration Form)

Perhaps most important, is Plaintiffs’ claim that Peter Madoff as a control person, allegedly ignored or possibly concealed "red flags evidencing the giant Ponzi scheme at BMIS":

Despite being a control person of BMIS and the highly experienced senior managing director, director of trading, chief compliance officer and general counsel of BMIS, there were many obvious material red flags evidencing the giant Ponzi scheme at BMIS and other alerts of fraudulent activity at BMIS that were recklessly ignored and/or concealed and/or not disclosed and/or consciously disregarded by Peter Madoff.  (Plaintiffs’  February 24, 2010 Complaint, p. 8, ¶31).

 Copyright Fred L. Abrams 2010