It’s not easy finding someone new to sue among what’s left of Bernard Madoff’s Ponzi scheme.
After all, Mr. Madoff’s money now comes from a commissary, and someone is already suing the Madoff trustee, who happens to be suing Mr. Madoff’s wife, his sons, his brother, his niece and several of Mr. Madoff’s more profitable clients.
But two ingenious victims hit upon a new target today: the S.E.C.
No one has done this yet, because the conventional legal wisdom is that the S.E.C., as a government agency, falls under a doctrine called “sovereign immunity,” which protects the government from exactly this kind of lawsuit. But the plaintiffs are going for it anyway, alleging that it’s not covered because the failure wasn’t in the S.E.C.’s policy, but in the execution of its duties.
It’s an unlikely case, since a decision against the S.E.C. would open the door to a flood of similar lawsuits from other Madoff victims, and presumably, other failed ventures that the S.E.C. should have been better about patrolling.
But if anyone can win this long-shot claim it might be Howard Elisofon, a partner at Herrick, Feinstein and the lead attorney on the suit. Mr. Elisofon was trial counsel for the S.E.C.’s Enforcement Division, according to his law firm bio, so he probably knows a thing or two about sovereign immunity. The bio also says he’s “lectured in numerous venues on securities and enforcement related topics, including Madoff and Ponzi schemes.”
Is “Madoff scheme” a new term? Could he really overtake Charles Ponzi after 90 years of Ponzi schemes? Would the change be retroactive? Or is it that Mr. Elisofon lectures about Bernie Madoff, and also about Ponzi schemes?