Madoff victims to recoup $32.1 million in Cohmad settlement

November 4, 2016 2:38 PM EDT

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By Jonathan Stempel

NEW YORK (Reuters) - Victims of Bernard Madoff's Ponzi scheme will receive another $32.1 million under a new settlement over the swindler's ties to Cohmad Securities Corp, whose clients invested more than $1 billion with him.

Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, on Friday announced the settlement with the estate of former Cohmad Chairman Maurice "Sonny" Cohn, his widow Marilyn Cohn, and their daughter Marcia Cohn, who was Cohmad's chief operating officer.

Though Cohmad is insolvent, Picard said he plans to keep pursuing claims against six other individuals who received "substantial fees" for helping Cohmad raise money for Madoff.

"Cohmad is one of the earliest and best-known names affiliated with Madoff, and this highly successful settlement brings one important chapter of (its) story to a close," Kathryn Zunno, a partner at Picard's law firm Baker & Hostetler, said in a statement.

The accord requires court approval, and would end a seven-year-old lawsuit against the Cohns.

It was announced one week after Picard reached a $277 million settlement with the estate of Beverly Hills investment adviser Stanley Chais, who also sent client cash to Madoff. California will receive $15 million from that accord.

Cohmad, Sonny and Marcia Cohn, and former Cohmad vice president Robert Jaffe in 2010 settled a related U.S. Securities and Exchange Commission probe into their dealings with Madoff.

They have denied knowing that Madoff had been running a decades-long fraud.

"Cohmad" is a contraction of "Cohn" and "Madoff."

Friday's settlement would boost Picard's total recovery for Madoff customers to $11.49 billion. Nearly $9.5 billion has been distributed. The trustee has estimated that the customers lost $17.5 billion.

Madoff, 78, is serving a 150-year prison term after pleading guilty to a fraud uncovered in December 2008.

The cases are Picard v Cohmad Securities Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 09-ap-01305; and In re: Bernard L. Madoff Investment Securities LLC in the same court, No. 08-01789.

(Reporting by Jonathan Stempel in New York; Editing by Lisa Shumaker)



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