Madoff investor Steven Simkin sues ex-wife for post judgment equitable distribution

Bernard Madoff’s latest victim is Laura Blank, ex wife of Steven Simkin who is suing her for a return of the portion of the $2.8 million divorce settlement he gave her. Mr. Simkin is arguing that he paid his wife $2.8 million in 2006 in consideration for ownership of the Bernard Madoff fund accounts, which, as we all now know, are worthless pieces of trash.
The question now is whether Mr. Simkin can come in post-judgment and demand that the court nullify an otherwise enforceable contract, on account of the unforeseeable turn of events that the investment accounts are not worth $2.8 million dollars but are in fact worth zero dollars. Is the wife to blame for that?
The purpose of the equitable distribution laws is to distribute marital property in a fair and reasonable manner in the event of a divorce. As I mentioned before here ( matrimonial and family law matters, unlike other types of cases, are never really res judicata. One can always go back in and seek a modification based on changed circumstances or newly discovered events that were not discoverable at the time the agreement was entered into. The court is always concerned with balancing the equities between the parties, even if the judgment of divorce has already been signed.
So, now, where are we with this? Well, is it a changed circumstance that Mr. Simkin’s portion of the property settlement is worthless? And if so was it discoverable at the time of the signing of the divorce that Bernard Madoff’s funds were a sham? Because if it was, then I don’t think the court is obligated to modify this agreement and I don’t think his beef should be with his wife.
By all accounts (certainly if you read up on commentariat on who know and understand what this Madoff thing is all about, unlike myself who isn’t intelligent enough to even “understand why this matters”) anybody who was investing in Maddof’s funds knew, or ought to have known, that something was not kosher with those returns. I mean, the kind of returns he was giving these investors just did not make sense, and every body knew it. So much so that going all the way back to 1999, Harry Markopolos informed the SEC that there was something fishy going on at Bernard Madoff Securities. Of course, Harry was running a competing fund called Rampart Investment Management and so people thought he was just jealous that Bernie’s funds were outperforming the markets but his was “under-performing.”  (Poor Harry is now terrified for the safety of his wife and kids now that he’s been revealed as the whistle blower, btw.)
But, so, the point being that many investors were financially savvy people who knew or ought to have known that Bernard was doing something shady in order to have the consistently high returns he was having but they looked the other way; it was all about greed on the part of some of these investors who already had a lot of money and wanted more – by any means necessary – and who, therefore, do not deserve any sympathy. Or so the argument goes. 
I don’t have an opinion on that aspect of this issue. My big thing is, at the time of the divorce between Mr. Simkin and his wife Laura Blank, was Mr. Simkin one of the innocent investors who was hoodwinked or was he one of the greedy ones who realized something was up yet chose to look the other way? Did he, Mr. Simkin have a personal obligation to investigate these returns, or maybe transfer the money to a more “transparent” fund with more realistic returns? I mean, what part did he play? Mr. Clueless?  Or did he just think, “boy, I’m making a killing with this so let me buy her out for a pittance and take all the bogus profits for myself cause at 10% per year compounded, omg I am gonna be filthy rich?” Because if it was more like the latter, then he was trying to hoodwink his wife and he does not deserve to set aside this property settlement. 
And, I mean, I am fair, I think. At least I try to be. But in this case, I don’t know that I sympathize with Mr. Simkin. I’m sorry but I just don’t see how it is his wife’s problem and responsibility that he lost his portion of the property settlement. It’s not as if she committed a fraud against him. Sure there have been changed circumstances, but the question is, whose fault is that?  This was not alimony that can be downwardly modified due to “changed circumstances.” This was a “property settlement.” He could have done anything he wanted with that money he got, as could she. He could have taken his money out of Bernie’s fund and bought real estate. He could have bought gold or futures. He could have bought treasuries, invested in REITS. He could have spent it all. Whatever. He chose to leave it in Bernie Madoff’s fund because he thought he would make a killing. He dissipated his own property settlement by going for a quick buck and unusually high return. He took that risk with his share of the marital property. So guess what? He took the risk, he bears the consequences. I don’t see how that is Laura’s fault or problem.
What if she’s already spent the money? I mean, she could have. Now what? What is he proposing that she do to make him whole? It seems to me that he is better off suing the Madoffs. If he can’t recoup from Bernie, try the sons. Or something. But I just don’t see how this is his ex-wife’s problem. I don’t see how the court can order her to give him squat.
But hey. I could be wrong cause what do I know? What do you understand? I’ve been wrong before and I could be totally wrong now. But this is my position and I’m sticking to it. I think Simkin needs to eat this loss and leave his ex wife be. At least, as far as this divorce goes, this issue is res judicata.
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