People who invested with imprisoned swindler Bernard Madoff through Westport National Bank will have to work a little harder to get back lost investment money because of a judge’s ruling.
The suit was filed against Westport National Bank on Post Road East. (CLICK TO ENLARGE) Dave Matlow for WestportNow.com/file
U.S. District Court Judge Peter C. Dorsey in New Haven has ruled that the victimized investors cannot file a class action lawsuit against the bank. Dorsey also denied the bank’s motion to dismiss.
The 26 plaintiffs were suing for part of $60 million lost from accounts the bank invested with Bernard L. Madoff Investment Securities. All together, more than 200 investors could have been part of the class. Dorsey remanded the case to Superior Court. (See WestportNow July 8, 2009)
The plaintiffs argue that the bank breached its contractual duty to serve as custodian of the accounts, a role designed to prevent fraudulent investment activity.
Dorsey determined that the plaintiffs’ complaints about the bank’s activities were “within the bounds” of the Securities Litigation Uniform Standards Act of 1998.
That federal law limits to 50 the number of plaintiffs filing a securities-related lawsuit in state court.
David Golub of the Stamford law firm of Silver Golub & Teitell, who is lead counsel for some of the plantiffs, said the ruling had a significant impact on the rights of the Westport National Bank depositors who have not yet brought an action against the Bank.
“It is important that individuals and retirement plans that lost money at Westport National Bank understand that the judge’s ruling requires that each individual and retirement fund trustee bring an individual action or join in an existing action to recover their money,” he said.
