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Madoff Whistleblower Lawyer Calls For New Finance Court
by Paula Schaap ,Senior Reporter , March 9, 2009
The lawyer who represents Harry Markopolos, who tried to tell the Securities and Exchange Commission that something was amiss with Bernard Madoff’s business, is part of an international movement calling for an international financial court.
Gaytri Kachroo, a partner with law firm McCarter & English, said Monday that the Madoff Case Global Alliance of Law Firms is proposing that an International Financial Court be established as an alternative forum for victims of financial crimes.
Kachroo is Markopolos’ long-time lawyer. She helped him prepare his February Congressional testimony about his decade-long attempts to persuade the SEC to investigate Madoff. The SEC’s head of enforcement, Linda Thomsen, resigned after Markopolos testified that the agency turned a deaf ear to his whistle-blowing.
The Global Alliance wants the new international court to be organized with the cooperation of international organizations like the United Nations Commission on International Trade Law (Uncitral), the International Monetary Fund and the World Bank. It is taking its proposal to the Group of Twenty (G-20) Finance Ministers and Central Bank Governors that will meet in London April 2.
Claire Kelly, a professor at Brooklyn Law School and an expert on international law, said that Uncitral could be an effective partner in coping with issues of fraud that transcends national boundaries.
Uncitral has “had remarkable success in generating norms to deal with international commercial law problems,” Kelly said.
However, when a new court is proposed, then issues of jurisdiction arise, she said.
“You have to get people willing to grant jurisdiction to that [international] court,” Kelly said. “I assume they will have a court that will divvy up whatever assets the perpetuator will have left. If those assets are in Spain, a Spanish court, or the EU more generally may want to divvy them up.”
The Global Alliance includes about 40 law firms from around the world that represent victims of Madoff’s alleged $50 billion fraud, including banks, individuals and hedge fund firms, according to its president Javier Cremades of Spanish law firm Cremades & Calvo-Sotelo.
The group plans to meet with members of Congress to advance their plan. Cremades said that a meeting had already been set up with Barney Frank (D.-Mass.), who chairs the House Financial Services Committee.
Kachroo and Markopolos are also set to have a private meeting with the new head of the SEC, Mary Schapiro.
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