Nonprofit Newswire | Litwin Foundation Sues SEC for Failing to Stop Madoff

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September 27, 2010; Source: Courthouse News | The Litwin Foundation, which funds cultural institutions in New York, has filed a $19 million lawsuit (The Litwin Foundation v. United States of America, 10-CV-7367, U.S. District Court, Southern District of New York) against the federal government charging that the SEC acted with “gross negligence” when it failed to uncover Bernhard Madoff’s $65 billion Ponzi scheme.

According to the 68-page complaint, SEC staff “committed numerous negligent, non-discretionary acts and inactions due chiefly to their inexperience, incompetence, bureaucratic pettiness, laziness, inattentiveness, and an agency culture of deference to powerful industry figures.” In February, on the Madoff Memos blog, it was reported that the Litwin Foundation had lost $69 million because of Madoff. In service of full disclosure, I suspect that the Litwins are related to me.—Ruth McCambridge