In this case, the Privy Council was invited to consider the vexed issue of how to establish the net asset value of an insolvent, fraud-tainted fund.
Fairfield Sentry was the largest feeder fund into what transpired to be a Ponzi-based scheme that was Bernard L. Madoff Investment Securities LLC (“BLMIS”).
Upon the revelation of the true nature of the Ponzi Scheme being perpetuated by BLMIS, Fairfied Sentry was placed into liquidation. In due course, its liquidator took the view that those investors who had made redemptions prior to the suspension of the calculation of NAV (which was quickly followed by the fund’s liquidation), had unfairly profited at the expense of those who were still investors at the time of its collapse. The basis upon which they had been redeemed was, he contended, mistaken, and they were liable to disgorge their payment, in favour of a rateable payment to all investors, irrespective of when they redeemed (or indeed, whether they had redeemed).
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Fairfield Sentry Limited (in Liquidation) et al -v- Migani and et al  UKPC 9