Greenwich Bank & Trust’s parent has been sued in a class action brought by disgruntled Madoff investors. The first suits were filed last year within days of Madoff’s confession but now David Golub has stepped in with a new bunch of litigants. He’s an excellent lawyer, although I don’t remember him being involved in this field back when I was hunting wicked stockbrokers. Will he succeed? Who knows – his theory seems to be (and I’m basing this on a few scant newspaper paragraphs, not from a reading of the actual complaint) is that some “Investment Adviser”, a Ron Silverman, pooled clients’ assets, invested them with Madoff, and used GN&T’s parent as a custodian. Silverman went belly up as quickly as Walter Noel did so Golub is after the bank, claiming that if they had taken physical possession of the securities Madoff claimed to be purchasing, they’d have discovered the fraud.
Well, maybe, but Madoff was supposed to be going in and out of the market numerous times a day so what’s a custodian supposed to do to take possession? At first blush, I’d say this was a loser, but Golub’s a far better lawyer that I ever was, so I’ll make no prediction.