MANHATTAN (CN) – A man who claims he lost $2.5 million in Bernard Madoff’s Ponzi scheme filed a class action against the United States, on behalf of anyone whose legitimate claims have been or will be denied by the Securities and Exchange Commission, whose negligence the man blames for the fiasco.
Jerry Guberman and his attorney claim the SEC was grossly negligent in its pathetic investigations of Bernard L. Madoff Investment Securities from November 1992 until December 2008 – during which Madoff pulled off the largest known Ponzi scheme in history.
Guberman says that despite the SEC’s receipt of numerous tips and complaints about Madoff’s activities for 16 years, it was only after Madoff confessed to his misdeeds in 2008, “as the weight of increasing redemptions toppled his scheme,” that his crimes stopped.
“Specifically, the SEC repeatedly and grossly failed to apprise itself of the basic facts concerning the allegations and failed to undertake any reasonable efforts to understand the allegations in the various complaints in order to determine what, if any action was appropriate under the circumstances,” the complaint states.
The SEC simply ignored the allegations “without any discernable explanation or justification,” according to the complaint. “The consequences for investors were disastrous.”
Guberman seeks compensatory damages and costs.
He is represented by Gayti Kachroo of Cambridge, Mass.