Nov 10 (Reuters) – The trustee seeking money for victims of imprisoned swindler Bernard Madoff plans an immediate appeal of a court decision throwing out $19 billion of damage claims against JPMorgan Chase & Co , the largest U.S. bank.

Irving Picard, the trustee, in a Thursday court filing signaled his intent to appeal U.S. District Judge Colleen McMahon’s Nov. 1 decision that he lacked power to pursue most claims against JPMorgan, Madoff’s main bank for two decades.

The Nov. 1 decision eliminated all but $425 million of Picard’s $19.9 billion lawsuit against JPMorgan, a big setback in Picard’s three-year effort to recover money for former customers of Bernard L. Madoff Investment Securities LLC.

McMahon sent the remainder of Picard’s case to the U.S. bankruptcy court in Manhattan. But the trustee asked that final judgment be entered on the major claims she dismissed, so that he can appeal to the 2nd U.S. Circuit Court of Appeals.

Seeing “no just reason for delay,” Picard said an immediate appeal would make a settlement more likely, and provide “much needed finality” as to whether his claims are viable.

“We continue to believe the trustee’s claims are baseless, and will continue to defend our case,” JPMorgan spokeswoman Jennifer Zuccarelli said on Thursday.

JPMorgan has previously said there was no showing that anyone at the bank knew of Madoff’s Ponzi scheme. Madoff, 73, is serving a 150-year prison term.

Nov 10 (Reuters) – Lehman Brothers Holdings Inc , which hopes next month to win court approval of its bankruptcy reorganization, agreed to a $40 million settlement of investor lawsuits claiming $7.7 billion of damages from mortgage debt.

According to papers filed Wednesday evening with the U.S. bankruptcy court in Manhattan, Lehman would pay $8.3 million toward the settlement, and insurers for officers and directors would fund the remaining $31.7 million.

Court approval is required.

This payout represents about one-half of 1 cent on the dollar of the alleged damages suffered by two investor groups that bought $20 billion of residential mortgage-backed securities packaged and sold by Lehman, once Wall Street’s fourth-largest investment bank.

“The opportunity to effectuate a settlement that resolves billions of dollars of exposure to the debtors and their estates in exchange for a relatively de minimus contribution of $8.3 million is in the best interests of the debtors, their estates and their creditors,” Lehman said in a court filing.

Lehman said the accord will nearly exhaust the remaining coverage under its 2007-2008 directors and officers liability insurance program, and that such coverage will run out before the end of the year.

Lawyers for Lehman and the investor plaintiffs did not immediately return calls seeking comment.

Nov 9 (Reuters) – A federal judge made clear he has big problems with a U.S. regulator’s approach to settling major securities fraud cases, perhaps imperiling a proposed $285 million settlement with Citigroup Inc over the sale of toxic mortgage debt.

U.S. District Judge Jed Rakoff, whose approval is required for the accord, grilled a senior U.S. Securities and Exchange Commission lawyer over why the regulator should accept a payout far smaller than the estimated $700 million that investors lost on the transaction, which Citigroup had successfully bet against.

At an hour-long hearing on Wednesday in Manhattan federal court, Rakoff also asked why the SEC would agree to bar Citigroup from similar wrongful conduct when it had no recent history of bringing contempt charges for violations of similar prior injunctions, including by that bank.

“It’s just for show,” Rakoff suggested, while questioning SEC Chief Litigation Counsel Matthew Martens.

Rakoff did not tip his hand on how or when he will rule. “This is an important matter, one that in the court’s view raises many interesting issues, and I want to resolve them and give a written opinion,” he said.

The SEC accused Citigroup of selling a $1 billion mortgage-linked collateralized debt obligation, Class V Funding III, in 2007 as the housing market was beginning to collapse, and then betting against the transaction.

One Citigroup employee, director Brian Stoker, was also charged by the SEC. He is contesting those charges.

Nov 9 (Reuters) – A federal judge made clear he has big problems with a U.S. regulator’s approach to settling major securities fraud cases, perhaps imperiling a proposed $285 million settlement with Citigroup Inc over the sale of toxic mortgage debt.

U.S. District Judge Jed Rakoff, whose approval is required for the accord, grilled a senior U.S. Securities and Exchange Commission lawyer over why the regulator should accept a payout less than half the $700 million that investors lost on the transaction, which Citigroup had successfully bet against.

At a Wednesday hearing in Manhattan federal court, Rakoff also questioned why the SEC would agree to an injunction barring Citigroup from similar wrongful conduct when it had no recent history of enforcing similar prior injunctions, including against that bank.

“It’s just for show,” Rakoff suggested, while questioning SEC Chief Litigation Counsel Matthew Martens.

Rakoff did not immediately rule on the settlement after an hour-long hearing.

“This is an important matter, one that in the court’s view raises many interesting issues, and I want to resolve them and give a written opinion,” he said.

The SEC accused Citigroup of selling a $1 billion mortgage-linked collateralized debt obligation, Class V Funding III, in 2007 as the housing market was beginning to collapse, and then betting against the transaction.

NEW YORK (Reuters) – Olympus Corp shareholders burned by the Japanese company’s accounting scandal are unlikely to recover investment losses in U.S. courts and might not fare much better suing in Japan.

Stockholders and bondholders often turn to U.S. courts in hopes of winning damages from companies, banding together in class-action lawsuits that let them sue as a group.

But two recent court decisions may have essentially shut U.S. courthouse doors to shareholders of the 92-year-old company, whose stock plunged in the wake of revelations that it hid losses since the 1990s.

Last year, the U.S. Supreme Court, in a case known as Morrison v. National Australia Bank Ltd, curbed investors’ ability to sue in U.S. courts over their purchases of securities on non-U.S. exchanges.

“Post-Morrison, American investors including institutional investors have effectively no remedy for this type of blatant securities fraud,” said Thomas Dubbs, a partner at Labaton Sucharow who argued on behalf of the Morrison plaintiffs in the Supreme Court. “They can try to go to Japan — but good luck.”

Olympus shares are listed in Japan. The maker of cameras and medical imaging equipment also has American depositary receipts that trade on the Pink Sheets, but these account for only about 1 percent of its float.

No institutional investor owned even as much as $1 million of the ADRs as of Tuesday, according to BNY Mellon Depositary Receipts. This makes it unlikely that ADR investors could collectively seek a big recovery by suing.

NEW YORK, Nov 9 (Reuters) – Olympus Corp (7733.T: Quote, Profile, Research) (OCPNY.PK: Quote, Profile, Research) shareholders burned by the Japanese company’s accounting scandal are unlikely to recover investment losses in U.S. courts and might not fare much better suing in Japan.

Stockholders and bondholders often turn to U.S. courts in hopes of winning damages from companies, banding together in class-action lawsuits that let them sue as a group.

But two recent court decisions may have essentially shut U.S. courthouse doors to shareholders of the 92-year-old company, whose stock plunged in the wake of revelations that it hid losses since the 1990s.

Last year, the U.S. Supreme Court, in a case known as Morrison v. National Australia Bank Ltd (NAB.AX: Quote, Profile, Research), curbed investors’ ability to sue in U.S. courts over their purchases of securities on non-U.S. exchanges.

“Post-Morrison, American investors including institutional investors have effectively no remedy for this type of blatant securities fraud,” said Thomas Dubbs, a partner at Labaton Sucharow who argued on behalf of the Morrison plaintiffs in the Supreme Court. “They can try to go to Japan — but good luck.”

Olympus shares are listed in Japan. The maker of cameras and medical imaging equipment also has American depositary receipts that trade on the Pink Sheets, but these account for only about 1 percent of its float.

No institutional investor owned even as much as $1 million of the ADRs as of Tuesday, according to BNY Mellon Depositary Receipts. This makes it unlikely that ADR investors could collectively seek a big recovery by suing.

NEW YORK, Nov 9 (Reuters) – Olympus Corp (7733.T: Quote, Profile, Research) (OCPNY.PK: Quote, Profile, Research) shareholders burned by the Japanese company’s accounting scandal are unlikely to recover investment losses in U.S. courts and might not fare much better suing in Japan.

Stockholders and bondholders often turn to U.S. courts in hopes of winning damages from companies, banding together in class-action lawsuits that let them sue as a group.

But two recent court decisions may have essentially shut U.S. courthouse doors to shareholders of the 92-year-old company, whose stock plunged in the wake of revelations that it hid losses since the 1990s.

Last year, the U.S. Supreme Court, in a case known as Morrison v. National Australia Bank Ltd (NAB.AX: Quote, Profile, Research), curbed investors’ ability to sue in U.S. courts over their purchases of securities on non-U.S. exchanges.

“Post-Morrison, American investors including institutional investors have effectively no remedy for this type of blatant securities fraud,” said Thomas Dubbs, a partner at Labaton Sucharow who argued on behalf of the Morrison plaintiffs in the Supreme Court. “They can try to go to Japan — but good luck.”

Olympus shares are listed in Japan. The maker of cameras and medical imaging equipment also has American depositary receipts that trade on the Pink Sheets, but these account for only about 1 percent of its float.

No institutional investor owned even as much as $1 million of the ADRs as of Tuesday, according to BNY Mellon Depositary Receipts. This makes it unlikely that ADR investors could collectively seek a big recovery by suing.

By Jonathan Stempel

(Reuters) – A federal judge ordered Raj Rajaratnam, the Galleon Group hedge fund founder sentenced to 11 years in prison for insider trading, to pay a record $92.8 million penalty in a related Securities and Exchange Commission civil case.

The penalty imposed by U.S. District Judge Jed Rakoff in Manhattan is in addition to the $63.8 million that Rajaratnam’s lawyers said their client has already paid in his criminal case, including $53.8 million that was forfeited and a $10 million fine.

A federal jury in May convicted Rajaratnam of 14 counts of securities fraud and conspiracy in the criminal case.

Rakoff’s colleague, U.S. District Judge Richard Holwell, last month imposed the 11-year prison term, the longest recorded U.S. sentence for insider trading. Rajaratnam is scheduled to begin his term on December 5.

In his ruling, Rakoff said a severe civil penalty for Rajaratnam was needed to make clear that insider trading should be “a money-losing proposition” for all who consider it.

He also said such a penalty was appropriate because the net worth of Rajaratnam, a former billionaire, “considerably exceeds” the penalties in the criminal case.

Nov 8 (Reuters) – The trustee seeking money for Bernard Madoff’s victims has increased the size of his lawsuit against family members of the imprisoned Ponzi schemer to $226.4 million.

Irving Picard, the trustee, in an amended complaint, said the Madoffs were “completely derelict” in overseeing operations at Bernard L. Madoff Investment Securities LLC, which collapsed when Madoff was arrested on Dec. 11, 2008.

He also said the Madoffs treated the firm like a “family piggy bank,” withdrawing huge sums to fund other businesses as well as personal expenses such as vacation homes and boats.

The defendants are Bernard Madoff’s brother Peter, who was the firm’s chief compliance officer; son Andrew, who was co-director of trading; the estate of son Mark, who was also co-director of trading; and niece Shana, a compliance officer. Mark Madoff committed suicide in December 2010.

Lawyers for the defendants did not immediately respond to requests on Tuesday for comment.

Picard first sued the Madoffs in October 2009 for $198.7 million. Most of the additional sum reflects salaries and bonuses that the trustee said were paid between 1993 and 2000.

Bernard Madoff has said he began his Ponzi scheme in the early 1990s, but prosecutors believe it began much earlier.

Nov 7 (Reuters) – The U.S. Securities and Exchange Commission and Citigroup Inc tried on Monday to convince a skeptical judge that a proposed $285 million civil settlement over alleged fraud involving toxic mortgage debt is fair to the bank’s shareholders and serves the public interest.

U.S. District Judge Jed Rakoff had ordered both sides to answer nine questions about the Oct. 19 accord, ahead of a Wednesday hearing. The judge previously has threatened to reject similar SEC settlements that, like the Citigroup pact, do not require companies to admit or deny wrongdoing.

The SEC had accused Citigroup of selling a mortgage-linked investment at the same time it bet the debt would fail. The charges relate to the sale of a collateralized debt obligation known as Class V Funding III in 2007, as the housing market was beginning to collapse.

Citigroup’s $285 million payment would include $160 million representing ill-gotten profit, $30 million of interest, and a $95 million fine.

One Citigroup employee, director Brian Stoker, was also charged by the SEC. He has contested the charges.

In court papers, the SEC said the settlement does not unfairly harm shareholders, who were not victims of the transaction but had been “indirect financial beneficiaries.”

It also said that while it is “reasonable to estimate” that investor losses might top $700 million, such losses were not the proper measure of damages. As a result, the SEC said it “did not devote resources” to calculate the precise amount.