5 Bernard L. Madoff, through BLMIS, operated a Ponzi scheme inducing investors to open discretionary trading...

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5 Bernard L. Madoff, through BLMIS, operated a Ponzi scheme inducing investors to open discretionary trading accounts with BLMIS for the ostensible purpose of buying and selling securities. No securities were purchased, and instead, BLMIS used the money invested by BLMIS tomers to make distributions to other BLMIS customers. After Madoff's arrest, the court appointed a trustee who was assigned the task of recovering funds transferred to investors who were aware of the fraud at the time they received the transfer. One investor, called S & R, argues that it is not required to return any funds because it received them without knowledge of the fraud. However, Stanley Shapiro, who was S & R agent when the fraud occurred, did know of the fraudulent scheme. The account statements for S & R were sent to the Shapiro's home address, Stanley reviewed those statements, and he directed BLMIS to execute fabricated trades for S & R for the purpose of increasing their market value or decreasing the owners' tax liability. May Shapiro's knowledge be imputed to S & R? Explain. 5 Bernard L. Madoff, through BLMIS, operated a Ponzi scheme inducing investors to open discretionary trading accounts with BLMIS for the ostensible purpose of buying and selling securities. No securities were purchased, and instead, BLMIS used the money invested by BLMIS tomers to make distributions to other BLMIS customers. After Madoff's arrest, the court appointed a trustee who was assigned the task of recovering funds transferred to investors who were aware of the fraud at the time they received the transfer. One investor, called S & R, argues that it is not required to return any funds because it received them without knowledge of the fraud. However, Stanley Shapiro, who was S & R agent when the fraud occurred, did know of the fraudulent scheme. The account statements for S & R were sent to the Shapiro's home address, Stanley reviewed those statements, and he directed BLMIS to execute fabricated trades for S & R for the purpose of increasing their market value or decreasing the owners' tax liability. May Shapiro's knowledge be imputed to S & R? Explain.

Answer rating: 100% (QA)

Yes Shapiros knowledge of the fraudulent scheme can likely be imputed to SR in this case Heres why A... View the full answer