According to the initial Complaint, this suit arises out of the largest and longest-running "Ponzi scheme" in history, an enormous fraud orchestrated by Defendant Bernard Madoff and facilitated by the reckless and grossly negligent conduct of the other Defendants, which cost investors many billions of dollars. This class action is brought on behalf of investors in Kingate Global Fund, Ltd. ("Kingate Global") and Kingate Euro Fund, Ltd. ("Kingate Euro"), two of the so-called "feeder funds" that channeled billions of dollars into Madoff s fraudulent operations. (References in this Complaint to "the Funds" shall be to Kingate Global and Kingate Euro.)
Plaintiffs seek to recoup losses of some $3.5 billion resulting from the Funds' investment of class members' assets in the Ponzi scheme conducted by Madoff and his firm, Bernard L. Madoff Investment Securities (`BMIS"). Plaintiffs and the class members were shareholders or equity holders in the Funds as of December 11, 2008, the date when Madoff's fraud was revealed. (All references to "Plaintiffs" shall henceforth include the Class.)
Although Madoff operated the Ponzi scheme, Defendants solicited investments from Plaintiffs and oversaw, controlled, and managed those investments, which they turned over to Madoff after purportedly vetting and monitoring him and his operations. Defendants in fact did not properly vet or monitor Madoff and, instead, falsely reported steadily increasing account values to Plaintiffs while paying themselves hundreds of millions of dollars in fees based on those fictitious amounts. As a result, Defendants are responsible for Plaintiffs' massive losses.
On August 7, 2009, the action was voluntarily dismissed without prejudice against the Defendant(s) Bernard L. Madoff. On January 22, 2010, Judge Deborah A. Batts granted the motion to consolidate several actions. According to the Order, the caption of these consolidated actions shall be: In re KINGATE MANAGEMENT LIMITED LITIGATION and the files of these consolidated actions shall be maintained under Master Docket Number 09 cv 5386. Labaton Sucharow LLP, Boies, Schiller & Flechner LLP and Cohen Milstein Sellers & Toll, PLLC are appointed as interim lead Counsels for Plaintiffs. The Court will revisit the appointment of lead Plaintiffs in this consolidated action at the class certification stage.
An Amended Consolidated Class Action Complaint was filed on May 18, 2010. The action added new Defendants to the action, and included new counts including violations Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The Defendants responded by filing several motions to dismiss the Amended Consolidated Class Action Complaint on July 19, 2010.
A notice of voluntary dismissal was filed on August 12, 2010, and on November 12, 2010, the judge signed the order voluntarily dismissing their claims under Section 10(b) and 20(a) against all the Defendants named in the Amended Consolidated Class Action Complaint.
According a news article dated April 20, 2011, on March 30, 2011, Judge Deborah A. Batts of the US District Court for the Southern District of New York dismissed a $3 billion consolidated securities class action against two so-called "feeder funds" that channeled investments into BMIS in a case entitled In Re Kingate Management Ltd. Litigation, 1:09-cv-05386 (S.D.N.Y. Mar. 30, 2011). After the US Supreme Court's decision in Morrison v. National Australia Bank Ltd. (OOTC:NABZY) , which found that Section 10(b) of the Securities Act of 1934 does not apply extraterritorially, the parties had voluntarily dismissed all federal claims under Section 10(b), leaving only the state common law claims intact. …In her dismissal order, Judge Batts concluded that the common law claims in Plaintiffs' consolidated action were "in connection with the covered securities" that Madoff claimed to have purchased, bringing them within the purview of SLUSA [Securities Litigation Uniform Standards Act of 1998]. As a result, the Plaintiffs' claims under state law alleging fraud, misrepresentation, material omission or the use of a deceptive device were barred. Although the Plaintiffs argued that their purchases in overseas funds should not trigger SLUSA preemption, the district court found that under the statute's broad construction, "it is enough that the fraud alleged 'coincide' with a securities transaction—whether by the Plaintiff or by someone else." The court further noted that Congress enacted SLUSA to prevent Plaintiffs from seeking to evade the protections against abusive securities litigation codified in the Private Securities Litigation Reform Act (PSLRA) by filing class action fraud claims based on state law rather than on federal securities law. Because Judge Batts also denied leave for Plaintiffs to amend their claims, SLUSA preemption proved fatal to the Plaintiffs' case.
The Plaintiffs have filed a Notice of Appeal which is currently pending in the Second Circuit Court of Appeals.
On August 7, 2009, the Plaintiffs voluntarily dismissed the Defendant without prejudice.
On January 22, 2010, the court issued an order granting motion to consolidate cases 1:09-cv-5386 (as Lead Case) with 1:09-cv-5470, 1:09-cv-5762, 1:09-cv-5882, 1:09-cv-6522 and granting motion to appoint David Boies, II, Labaton Sucharow LLP, Boies, Schiller & Flechner LLP and Cohen Milstein Sellers & Toll, PLLC as interim lead Counsels for Plaintiffs.
On November 12, 2010, the court approved the Plaintiffs' notice of voluntary dismissal.
On March 30, 2011, the court granted the Defendants' motion to dismiss with prejudice.
On March 20, 2012, the court granted the dismissal of Plaintiff Silvana Worldwide Corp. without prejudice and without costs.
