When a tsunami’s waves recede, they leave behind the flotsam and jetsam that have been caught in their tumultuous path. So too with global financial crises. When the waters of the global financial tidal wave of 2008 receded, they revealed and left in their wake all manner of risky, ill-advised, and downright illegal financial schemes and scams. Among those most colorful and destructive are the Ponzi schemes, big and small, that were caught in the net of law enforcement officials, regulators, bankruptcy trustees, and plaintiffs’ counsel.

By now, so much has been written about the mechanics of the biggest Ponzi schemes and their perpetrators’ successful efforts to avoid detection by the Securities and Exchange Commission that those interested in the details may find a wealth of information. Bernard Madoff’s scheme is one that lingers in the public imagination, to say nothing of separate schemes perpetrated by Robert Allen Stanford, Tom Petters, Scott Rothstein, Marc Dreier, Barry Tannenbaum, Beau Diamond, and Danny Pang. One of the most important topics in connection with these schemes and restitution for them are the powers and prosecutions of the various bankruptcy trustees. As those trustees’ claw-back efforts have targeted banks and pension funds, those targets have asserted claims against their fund managers, investment advisers, accountants, and others that steered investments to various Ponzi schemes. Those defendants, in turn, are making demands upon their insurers for a defense against the claims, as well as indemnification.

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