(Reuters) - The court-appointed trustee liquidating Bernard Madoff’s firm said on Friday he has reached a settlement with the family of late Beverly Hills money manager Stanley Chais that will provide more than $277 million to victims of Madoff’s Ponzi scheme.

Bernard Madoff exits the Manhattan federal court house in New York in this January 14, 2009 file photo. REUTERS/Brendan McDermid/File Photo

Irving Picard, the trustee, said victims will receive at least $232 million of cash, and the rights to $30.7 million of assets that are expected to be sold.

A separate $15 million fund will pay claims by California investors, resolving litigation by that state’s Attorney General Kamala Harris, and which had been brought in 2009 by her predecessor, California Governor Jerry Brown.

Friday’s settlement requires approval by U.S. Bankruptcy Judge Stuart Bernstein in Manhattan, who oversees the liquidation of Bernard L. Madoff Investment Securities LLC. A hearing is scheduled for Nov. 22.

The cash payout would boost to $11.46 billion the sum that Picard has recovered for former Madoff customers, or 65 percent of their estimated $17.5 billion loss. Picard has said half of the 2,597 accounts with valid claims have been fully paid off.

Madoff, 78, is serving a 150-year prison term after pleading guilty to running a decades-long fraud uncovered in December 2008.

Chais, who died in September 2010 at the age of 84, once handled investments for elite Hollywood clients like Oscar-winning director Steven Spielberg, and had been a close friend of Madoff since the 1960s.

Picard had sought to recoup $1.32 billion of “fictitious profits” that he claimed the Chais defendants, including Chais’ widow Pamela, withdrew from Madoff’s firm.

The U.S. Securities and Exchange Commission in June 2009 filed a related civil lawsuit against Chais, claiming he ignored red flags that Madoff’s seemingly steady returns were bogus.

In a court filing, Picard’s lawyers said the settlement covered all of Stanley Chais’ estate and substantially all of his widow’s assets, and represented “a good faith, complete and total compromise.”

Chais had maintained that he was also a Madoff victim and had lost nearly all of his own money.

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

Through Sept. 30, more than $1.42 billion has been spent on recovery efforts, including $824.6 million for legal fees for Picard’s law firm Baker & Hostetler and $370.2 million for consultant fees, a Thursday court filing shows.

A $4 billion fund overseen by former SEC Chairman Richard Breeden will also compensate Madoff victims.

The cases are Picard v Chais et al, U.S. Bankruptcy Court, Southern District of New York, No. 09-ap-01172; and In re: Bernard L. Madoff Investment Securities LLC in the same court, No. 08-01789. </s> SACRAMENTO, Calif. (AP) — California will recover $15 million related to the massive Ponzi scheme engineered by Bernard Madoff as part of a larger agreement liquefying the $277 million estate of a Beverly Hills investment adviser, officials said Friday.

The settlement ends a 7-year-old lawsuit filed by the state attorney general against Stanley Chais, who charged what officials called astronomical fees to invest hundreds of millions of dollars from more than 460 often-elderly victims.

Chais, who died in 2010, collected nearly $270 million in fees between 1995 and 2008 while presenting himself as an “investment wizard,” according to the lawsuit filed in Los Angeles Superior Court.

In fact, he simply funneled investors’ life savings to Madoff, the one-time Nasdaq chairman whose $20 billion financial pyramid collapsed in 2008, the lawsuit said.

The agreement filed in federal bankruptcy court in New York settles separate lawsuits against Chais that trustees said will essentially turn over his estate to his victims.

That includes nearly $263 million in cash and other assets to the Bernard L. Madoff Investment Securities customer fund, and another $15 million that will be administered by the California attorney general’s office to pay claims by investors in companies operated by Chais.

Investors in the Chais-operated companies cannot lay claim to the larger amount of money because that share will go to those who invested directly with Madoff, not through so-called “feeder funds,” said Kristin Ford, a spokeswoman for California Attorney General Kamala Harris.

The lawsuit estimates there are more than 460 defrauded investors in three Chais-related companies, which would work out to reimbursements of about $32,600 each. Ford said the actual awards will be decided by an administrator and depend in part on how many former clients file claims. The state can also use up to $750,000 of the settlement money for its administrative costs.

Chais’ investors had no idea the money that they had invested since the 1970s was being sent to Madoff, who now is serving a 150-year prison sentence after pleading guilty to fraud charges. The state’s lawsuit says some lost their homes and had to move in with their adult children.

“For over 30 years, Stanley Chais unscrupulously defrauded Californians, many of them elderly, by taking their life savings, charging steep fees, and funneling their money to Bernie Madoff’s elaborate Ponzi scheme,” Harris said in a statement.

The settlement with Chais’ widow and other family members brings total recoveries related to Madoff to more than $11.4 billion, Stephen Harbeck, president and chief executive officer of the Securities Investor Protection Corporation, said in a statement.

Nearly $9.5 billion of that money has already been distributed. Distributing all of it is expected to return more than 65 percent of the principal estimated to have been lost by Madoff customers whose claims have been allowed by trustees.

Officials did not say how much of Chais’ estate would be left for his widow and other survivors.

The California lawsuit accusing Chais of securities and investment fraud was filed by Harris’ predecessor, now-Gov. Jerry Brown. But the settlement was negotiated over the last four years under the tenure of Harris, who is running for the U.S. Senate against a fellow Democrat. </s> WASHINGTON (AP) — A unanimous Supreme Court on Tuesday sided with the government in a legal clash over the nation’s insider trading laws, a victory for prosecutors seeking to curb corruption on Wall Street.

The justices ruled that sharing corporate secrets with friends or relatives is illegal even if the insider providing the tip doesn’t receive anything of value in return.

The ruling upheld the conviction of Bassam Yacoub Salman, an Illinois man convicted of making investments based on inside information he received from a member of his extended family. It also limited the impact of a 2014 ruling from the federal appeals court in Manhattan that had raised doubts about the scope of insider trading laws.

Prosecutors have relied on a broad reading of the law to support aggressive anti-corruption efforts that have netted more than 80 arrests and 70 convictions for insider trading over several years.

Writing for the court, Justice Samuel Alito rejected arguments that insider trading prosecutions should be limited to those who make secret profits from revealing confidential data. Government officials had argued that sharing corporate secrets with friends or family is just as damaging to the integrity of financial markets.

Salman was prosecuted for earning more than $1.5 million in profits from trading on nonpublic information he received about future health care deals. The tip originated with Salman’s brother-in-law, Maher Kara, an investment banker at Citigroup Global Markets in New York. Kara passed the tip on to his own brother, Michael Kara, who then gave it to Salman.

Salman was aware that Maher Kara was the source. Kara pleaded guilty to conspiracy and securities fraud charges.

“Salman’s jury was properly instructed that a personal benefit includes the benefit one would obtain from simply making a gift of confidential information to a trading relative,” Alito said.

Alito said that Maher Kara disclosed confidential information as a gift to his brother with the expectation that his brother would trade on it. That was a breach of his duty of trust to Citigroup, Alito said, and that breach of duty continued when Salman received the information and traded on it.

Prosecutors had suffered a blow two years ago when the federal appeals court in Manhattan overturned the conviction of hedge fund managers Todd Newman and Anthony Chiasson after finding they were too far removed from inside information to be prosecuted.

The Manhattan court said Newman and Chiasson got their information through a chain of traders who didn’t have a close personal relationship with them. The ruling forced Manhattan U.S. Attorney Preet Bharara to drop some cases and put others on hold.

Alito specifically noted the Manhattan ruling and rejected any notion that an insider doesn’t violate the law unless he receives something of value when giving confidential information to a friend or relative.

Bharara said in a statement that the Supreme Court “easily” rejected the Manhattan court’s “novel interpretation of insider trading laws.”

“The Court stood up for common sense and affirmed what we have been arguing from the outset — that the law absolutely prohibits insiders from advantaging their friends and relatives at the expense of the trading public,” Bharara said. “Today’s decision is a victory for fair markets and those who believe that the system should not be rigged.”

The ruling is likely to affect high-profile hedge fund manager Leon Cooperman, who earlier this year was accused by federal regulators of illegally trading on confidential information he learned from a company executive. Cooperman had told his investors in a letter that federal prosecutors were holding off on pursuing charges until the Supreme Court ruled in the Salman case. </s> NEW YORK (Reuters) - U.S. film and TV studio The Weinstein Company, whose ex-Chairman Harvey Weinstein has been accused of sexual harassment and assault, said on Monday it filed for bankruptcy with an offer from an affiliate of private equity firm Lantern Capital Partners to acquire its assets.

The Weinstein Company filed for bankruptcy in the Delaware court, listing $500 million to $1 billion in liabilities and $500 million to $1 billion in assets. bit.ly/2prGdNm

The studio’s bankruptcy comes after it spent months looking for a buyer or investor. The company inked a deal with an investor group led by former Obama administration official Maria Contreras-Sweet, but the group terminated its offer earlier this month after seeing that the company had more liabilities than previously disclosed.

Weinstein Co said in a statement it entered into a “stalking horse” agreement with a Lantern Capital affiliate, that would purchase substantially all of the assets of the company.

The offer from Lantern will set the floor for higher and better bidders in a court-supervised auction.

Lions Gate Entertainment Corp had made an earlier offer for some of the company’s assets, as had Qatar-owned film company Miramax, which was founded by Harvey Weinstein and his brother Bob Weinstein. Both could be among potential bidders in the auction.

More than 70 women accused the company’s co-founder, Harvey Weinstein, who was one of Hollywood’s most influential men, of sexual misconduct, including rape. Weinstein has denied having non-consensual sex with anyone.

“Since October, it has been reported that Harvey Weinstein used non-disclosure agreements as a secret weapon to silence his accusers. Effective immediately, those ‘agreements’ end,” the company said in an emailed statement.

Movie producer Killer Content also said bankruptcy would be the best option for the company, and that it may be interested in the studio’s assets in a bankruptcy auction.

In February, New York Attorney General Eric Schneiderman sued the Weinstein Company, Harvey Weinstein and his brother Bob Weinstein, alleging that Harvey Weinstein sexually harassed employees and the company failed to respond. Bob Weinstein co-founded the company and is the co-chairman.

“This is a watershed moment for efforts to address the corrosive effects of sexual misconduct in the workplace,” Schneiderman said in a statement after the Weinstein Company’s announcement on Monday.

Launched in October 2005, the studio produced and distributed critically acclaimed hits including “The King’s Speech” and “Silver Linings Playbook,” as well as TV series such as long-running fashion reality competition “Project Runway.” </s> The Weinstein Co. Files For Bankruptcy, Cancels Non-Disclosure Agreements

The Weinstein Company Holdings LLC announced that it has filed for voluntary bankruptcy and entered into an agreement to sell its assets to a Dallas-based equity firm.

It also announced that it is ending all nondisclosure agreements that prevented victims of alleged sexual misconduct at the hands of disgraced Hollywood mogul Harvey Weinstein from talking about their experiences.

The Weinstein Co. will enter into a "stalking horse" agreement with an affiliate of Lantern Capital Partners in conjunction with entering into bankruptcy proceedings.

But it was the second and third paragraphs of the statement that are likely to draw even greater attention in light of the many women who have come forward to accuse Weinstein of sexually harassment and abuse.

"Today, the Company also takes an important step toward justice for any victims who have been silenced by Harvey Weinstein. Since October, it has been reported that Harvey Weinstein used non-disclosure agreements as a secret weapon to silence his accusers. Effective immediately, those "agreements" end. The Company expressly releases any confidentiality provision to the extent it has prevented individuals who suffered or witnessed any form of sexual misconduct by Harvey Weinstein from telling their stories. No one should be afraid to speak out or coerced to stay quiet. The Company thanks the courageous individuals who have already come forward. Your voices have inspired a movement for change across the country and around the world."

The announcement comes after a group of investors, led by former Obama administration official, Maria Contreras-Sweet, tried and failed to purchase the assets of The Weinstein Co. earlier this month. That deal, which would have re-invented the firm as a female-run company, collapsed upon the discovery of debt previously unknown by the investors.

Weinstein has been accused of raping or sexually assaulting many women over decades.

New York Attorney General Eric Schneiderman, who has brought suit against The Weinstein Co., Harvey Weinstein and his brother, Bob Weinstein, issued a statement praising the announcement. </s> FILE PHOTO: Former SAC Capital Advisors portfolio manager Mathew Martoma exits the U.S. District Court for the Southern District of New York, following sentencing for insider trading, in Lower Manhattan September 8, 2014. REUTERS/Brendan McDermid

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday rejected an appeal by Mathew Martoma, a former portfolio manager for billionaire Steven A. Cohen, challenging a conviction for insider trading.

The Supreme Court left in place a June 2018 ruling by the New York-based 2nd U.S. Circuit Court of Appeals, which found there was enough evidence to establish Martoma’s guilt despite defective jury instructions in the trial. Martoma had worked at the CR Intrinsic Investors unit of Cohen’s SAC Capital Advisors LP.

At issue in the appeal was whether the prosecution must prove insider trading by showing that the individual who supplied a tip sought personal gain or intended to confer a benefit to someone else.

The 2nd Circuit had upheld Martoma’s conviction and nine-year prison term in August 2017, but in a modified ruling almost a year later withdrew its prior finding that the jury instructions were “not obviously erroneous.”

The appeals court decided that the instructions wrongly allowed a conviction solely on evidence that a Michigan doctor had tipped Martoma about a Alzheimer’s drug trial to maintain a friendship, rather than to offer a benefit or further a “quid pro quo” relationship - something done in exchange for something else.

Martoma was convicted in February 2014 for making $275 million of illegal gains in Elan Corp and Wyeth. Now called Point72 Asset Management LP, SAC pleaded guilty to fraud and paid $1.8 billion in U.S. criminal and civil settlements. Cohen was not criminally charged. </s> IMF Managing Director Christine Lagarde goes on trial over her handling of a dispute with Bernard Tapie, a former government minister (AFP Photo/SAUL LOEB)

Paris (AFP) - IMF chief Christine Lagarde goes on trial in France on Monday over a massive state payout to a flamboyant tycoon when she was finance minister in a case that risks tarnishing her stellar career.

Lagarde denies the charges of negligence, arguing she was acting "in the state's interest" in making the payment to Bernard Tapie, the former owner of sportswear giant Adidas and Olympique Marseille football club.

If found guilty, Lagarde could receive a one-year prison sentence and a 15,000 euro ($15,900) fine.

Whatever the outcome, the case risks damaging the image of 60-year-old Lagarde, a former corporate lawyer who progressed through the finance ministry to her current role as one of the world's most powerful women.

The case also threatens the credibility of the International Monetary Fund, whose last three managing directors have faced trial.

Lagarde, who was named to a second term in February this year, has received the full backing of the IMF over the case.

She will be tried by the Court of Justice of the Republic, a tribunal that hears cases against ministers accused of wrongdoing in the discharge of their duties.

The accusations stem from Lagarde's handling of a dispute with Tapie, a former government minister who claimed a state bank defrauded him in its sale of Adidas.

Tapie owned the firm between 1990 and 1993 but lost control of it after he went bankrupt. He also owned Marseille when they won the 1993 European Cup, the forerunner of the Champions League, but they were later embroiled in a match-fixing scandal.

On becoming finance minister in 2007 under the newly elected president Nicolas Sarkozy, Lagarde ordered that Tapie's long-running battle with the state be resolved by arbitration.

The decision was hugely costly, with Tapie initially walking away with a staggering 404 million euros ($427 million) in compensation in 2008. After a lengthy court battle, he has since been ordered to repay the money.

Investigators suspect the arbitration process was rigged in favour of Tapie, who had supported Sarkozy in his 2007 election campaign.

Lagarde, who served as finance minister until 2011, has always insisted she acted in France's best interests.

Although she is not accused of personally profiting from the payment, she has been criticised for failing to challenge the award.

The prosecution says that through her actions, Lagarde "deprived the state of a chance to avoid this money being misused".

Others face fraud charges over the affair, including 73-year-old Tapie, his lawyer, one of the arbitrators, Lagarde's former chief of staff in the finance ministry and the current head of the telecom group Orange, Stephane Richard.

She will be judged by a panel of three judges and 12 lawmakers selected from France's upper and lower houses of parliament.

Lagarde will be defended by a team of lawyers led by Patrick Maisonneuve, a star of the French legal world.

Lagarde succeeded her disgraced compatriot Dominique Strauss-Kahn as IMF managing director after he resigned to fight sexual assault charges.

Another former IMF head, Spaniard Rodrigo Rato, is currently standing trial for misusing funds when he was head of Spanish lender Bankia.

The IMF plays a key role in the global financial system, acting as a lender of last resort to countries in financial difficulties. It also monitors financial markets and acts as an influential policy advisor to governments.

Lagarde has been a key player in bailout negotiations for Greece and has also worked to reform the US- and Europe-dominated institution to reflect China's growing global leverage.

She has fashioned herself as a model for talented women fighting male dominance in the IMF and other large organisations and has previously been touted as a possible French presidential contender although she denies any such ambitions. </s> The Weinstein Company files for bankruptcy, dissolves non-disclosure agreements with sexual harassment accusers

The Weinstein Company filed for bankruptcy protection on Monday (19 March) with a buyout offer in hand from a private equity firm, the latest twist in its efforts to survive the sexual misconduct scandal that brought down co-founder Harvey Weinstein, shook Hollywood and triggered a movement that spread out to convulse other industries.

The company also announced it was releasing any victims of or witnesses to Weinstein’s alleged misconduct from non-disclosure agreements preventing them from speaking out. That step had long been sought by New York Attorney General Eric Schneiderman, who filed a lawsuit against the company last month on behalf of its employees.

“Since October, it has been reported that Harvey Weinstein used non-disclosure agreements as a secret weapon to silence his accusers. Effective immediately, those ‘agreements’ end,” the company said in a statement. “No one should be afraid to speak out or coerced to stay quiet.”

In a statement, Schneiderman praised the decision as “a watershed moment for efforts to address the corrosive effects of sexual misconduct in the workplace.”

The movie and TV studio becomes the first high-profile company to be forced into bankruptcy in the nationwide outcry over workplace sexual misconduct. Dozens of prominent men in entertainment, media, finance, politics and other realms have seen their careers derailed, but no other company has seen its very survival as tightly intertwined with the fate of one man as the Weinstein Company.

Some 80 women, including prominent actresses, have accused Harvey Weinstein of misconduct ranging from rape to harassment. Weinstein, who was fired as his company’s CEO in October, has denied any allegations of non-consensual sex.

The Weinstein Company said it has entered into a “stalking horse” agreement with an affiliate of Dallas-based Lantern Capital Partners, meaning the equity firm has agreed to buy the company, subject to approval by the U.S. Bankruptcy Court in Delaware.

Lantern was among a group of investors that had been in talks for months to buy the company outside of bankruptcy. That deal was complicated when Schneiderman filed his lawsuit, citing concerns that the sale would benefit executives accused of enabling Weinstein’s alleged misconduct and provide insufficient guarantees of compensation for his accusers. Talks to revive the sale finally fell apart two weeks ago when the group of buyers said they had discovered undisclosed liabilities.

The Weinstein Company said it chose Lantern as a potential buyer because the firm was committed to keeping on the studio’s employees as a going concern.

“While we had hoped to reach a sale out of court, the Board is pleased to have a plan for maximizing the value of its assets, preserving as many jobs as possible and pursuing justice for any victims,” said Bob Weinstein, who co-founded the company with his brother Harvey in 2005 and remains chairman of the board of directors.

Lantern co-founders Andy Mitchell and Milos Brajovic said they were committed to “following through on our promise to reposition the business as a pre-eminent content provider, while cultivating a positive presence in the industry.”

Under bankruptcy protection, civil lawsuits filed by Weinstein’s accusers will be halted and no new legal claims can be brought against the company. Secured creditors will get priority for payment over the women suing the company.

Schneiderman’s lawsuit will not be halted by the bankruptcy filing because it was filed by a law enforcement agency. Schneiderman said his investigation would continue and that his office would engage with the Weinstein Company and Lantern to ensure “that victims are compensated, employees are protected moving forward, and perpetrators and enablers of abuse are not unjustly enriched.”

Other bidders also could emerge during the bankruptcy process, particularly those interested in the company’s lucrative 277-film library, which includes award-winning films from big-name directors like Quentin Tarantino and horror releases from its Dimension label. Free of liabilities, the company’s assets could increase in value in a bankruptcy.

In more fallout over the scandal, New York’s governor directed the state attorney general to review a decision by the Manhattan district attorney’s office not to prosecute a 2015 case involving an Italian model who said Weinstein groped her.

The bankruptcy process will bring the company’s finances into public view, including the extent of its debt. The buyers who pulled out of the sale earlier this month said they discovered up to $64 million in undisclosed liabilities, including $27 million in residuals and profit participation. Those liabilities came on top of $225 million in debt, which the buyers had said they would be prepared to take on as part of a $500 million acquisition deal.

The Weinstein Company already had been struggling financially before the scandal erupted in October with a news stories in The New York Times and The New Yorker. Harvey and Bob Weinstein started the company after leaving Miramax, the company they founded in 1979 and which became a powerhouse in ’90s indie film with hits like Pulp Fiction. After finding success with Oscar winners The Artist and The King’s Speech, the Weinstein Company’s output and relevance diminished in recent years. The company let go 50 employees in 2016 and continuously shuffled release dates while short of cash.

Last year, the studio sold distribution rights for the movie Paddington 2 to Warner Bros. for more than $30 million. </s> International Monetary Fund managing director Christine Lagarde went on trial in Paris on Monday over her role in a €400 million payout of French taxpayer money to businessman Bernard Tapie in 2008.

Ms Lagarde (60) was France’s finance minister in the government of then-president Nicolas Sarkozy when she approved an out-of-court settlement with Mr Tapie to end a long-running dispute between the magnate and the French state.

Accused of negligence leading to misuse of public funds, she denies any wrongdoing. She risks up to a year in jail and a fine of €15,000 if convicted.

Were it to happen, a maximum sentence could raise questions about the widely respected politician’s ability to continue as head of the Washington-based IMF, where her predecessor Dominique Strauss-Kahn quit in 2011 over a sex assault scandal.

On the eve of Monday’s trial opening, Ms Lagarde told France 2 public television she was confident and she denied favouring Mr Tapie or having acted on Mr Sarkozy’s orders.

“Negligence is a non-intentional offence. I think we are all a bit negligent sometimes in our life. I have done my job as well as I could, within the limits of what I knew,” she said.

Investigators have said that Ms Lagarde’s behaviour in the case went beyond simple carelessness.

Her trial is only the fifth to be held before the Cour de Justice de la Republique, a special tribunal created in 1993 to try cabinet ministers.

A panel of 15, including 12 politicians from both the lower and upper houses of parliament, will hear the case, which is scheduled to run until December 20th.

They are expected to focus on correspondence between Ms Lagarde and her staff as well as the government body that manages state corporate holdings, which advised against private arbitration.

The case dates back to a time when Mr Tapie sued the state for compensation after selling his stake in sports company Adidas to then state-owned Credit Lyonnais in 1993.

He accused the bank of defrauding him after it resold its stake for a much higher price. With the case stuck in the courts, the two sides agreed to private settlement and Mr Tapie was awarded in 2008 a €403 million payout, including interest.
Irving Picard, a court-appointed trustee liquidating the Madoff asset management firm, says that he has reached a settlement with the family of the late Stanley Chais, in connection with monies that had been funneled from California investors, through Chais, into Madoff's Ponzi scheme.