SIPC balks at Mets' request to throw out Madoff suit

The Securities Investor Protection Corp. opposed a request by the owners of the New York Mets baseball team to dismiss a $1 billion suit by the trustee liquidating Bernard Madoff's firm. The trustee, Irving Picard, is suing Fred Wilpon and Saul Katz and their firm, Sterling Equities, seeking the return of $700 million in principal and $300 million in profit from Madoff's Ponzi scheme. Picard claims the team's owners had a duty to investigate “red flags” warning of possible fraud. SIPC today asked U.S. District Judge Jed Rakoff in Manhattan to let the suit go forward, arguing that Picard has the legal authority to pursue the claim. Rakoff agreed this month to review the case, which Picard filed last year in bankruptcy court. He said judges have struggled with the duty of inquiry into fraud for more than half a century and the duty may not have applied to the Mets owners. --Bloomberg News--