Mass. Madoff victim sues regulator
Robert Lappin, a Salem businessman and founder of the Lappin Charitable Foundation, is among nine plaintiffs who yesterday filed a class-action lawsuit, alleging negligence by federal securities regulators in the Bernard Madoff case.
The lawsuit, filed in federal court in New York against the Securities and Exchange Commission, seeks millions of dollars in restitution for the plaintiffs, who, according to their lawyer, lost a total of about $70 million in the Madoff Ponzi scheme.
“We’re saying the SEC was responsible, negligent, for the losses suffered by the plaintiffs,’’ said Howard Kleinhendler, the lawyer.
Lappin is suing in his capacity as trustee of the retirement fund of his real estate firm, Shetland Properties. The fund lost $5 million in the swindle. Lappin, 88, personally reimbursed the plan for those losses.
The Lappin Charitable Foundation, which supports programs for Jewish youth, also said it lost $8 million, but is not part of this suit. In an example of how complicated the math can be for victims, the trustee in the Madoff bankruptcy case last month sued Lappin to return $2 million in fictitious gains. It’s unclear whether those gains were reaped by the foundation, the business, or Lappin personally.
Lappin could not be reached late yesterday.
The suit, first filed in December, was refiled yesterday.