Irving Picard, the lawyer who is liquidating Bernard Madoff's estate, went on the warpath this month.
He sued to recover US$50 billion (Dh183.65bn) from investors in the disgraced financier's Ponzi scheme who got out of it with profits, and the spotlight quickly turned to the banking powerhouses from which he wanted money: UBS, JPMorgan, Citigroup and HSBC, among others.
They were on the hook, he alleged, for tens of billions of dollars after putting money with Madoff and coming away with profits, even though they presumably had no idea the whole thing was a sham.
Less noticed, though, were the scores of smaller investors from whom Mr Picard wanted restitution, including a smattering of former Madoff clients from the Gulf. Also little noticed amid the bluster of blockbuster charges against some of the world's biggest banks were the tricky moral questions inherent in the suits.
There is no denying that Mr Picard and the other lawyers trying to get money for victims of Madoff's scheme have a legal basis for doing so. Such clawback cases are fairly common in the prosecution of white-collar fraud in the US. But the moral foundation of those laws seems somewhat less sound.
The guiding principle of the suits seems to be that since Madoff's swindle was a fraud, people and institutions who made money from it - even unwittingly - were on the receiving end of ill-gotten money. They should therefore have to disgorge it. It's the same way the US justice system treats stolen property: if you unknowingly buy fleeced goods, you have to return them to their rightful owners even if you didn't know they were hot items.
That is a flawed principle as it applies to the Madoff case, though, insofar as it fails to recognise the equal culpability - or lack thereof - of all investors in the scam. If you're going to go after investors who got in and got out years ago with a profit, it would seem you need a finding that they were more guilty than the people left holding the bag. Prosecuting the innocent doesn't seem fair, after all. And yet there is little evidence that investors who said sayonara when they were billions of dollars richer had more knowledge that Madoff's hedge fund was a flimsy house of cards.
Of course, there is an argument to be made that what Mr Picard is doing is absolutely equitable. If we presume all investors were equally unaware of the scam, they should all share equally in any losses suffered because of it. And because the people who kept their money in until the bitter end suffered most, they should get some compensation from those who exited with profits.
That's a rational justification for Mr Picard's cases. But a settlement along those lines would still be imperfectly equitable. Investors who left Madoff's scam years ago took their money out without ever considering that they might be asked to give it back. And many of those investors certainly used those funds to make other investments - investments that may have lost value or are tied up in assets that are hard to sell. They bought houses, cars, office buildings, shares in private-equity funds and other hedge funds that are undoubtedly tough to liquidate.
The problem is that if Mr Picard's cases succeed, they risk creating a new class of victims instead of distributing profits from the fraud equally among its dupes. Would such an outcome be fair? Not exactly.
Yet if Mr Picard takes another tack and tries to apply a greater degree of culpability to some Madoff investors, the already complex case will become all the more tangled. He would have to argue either that big banks and other investors were wilfully blind to the scheme - that they would have uncovered it if they did a full investigation - or that they knew it was a fraud and went along with it anyway. He can't have it both ways.
"If you're saying on the one hand that the banks knew about it, they were reckless, they knew what was going on, and at the same time they were wilfully blind, you have an inherent problem in the lawsuits," David Berg, a lawyer and best-selling author, told Bloomberg Television recently. "But he'll overcome that."
Despite the questions that still linger about the fairest denouement for the world's biggest financial fraud, what's clear so far is that Mr Picard's strategy is bearing fruit. Union Bancaire Privee, a Swiss bank that counted investors from the Middle East among clients it steered into Madoff funds, reached a $500 million out-of-court settlement with the trustee this month, although it did not admit guilt. The widow of Jeffry Picower, a major investor in Madoff's funds, later reached a record $7.2bn settlement with Mr Picard.
Fundamentally, everyone wants investors who lost money to Madoff to be given as much of their money back as possible. As the legal cases swirl, though, it's important not to lose sight of the ethical questions they raise. How justice is administered for Madoff's victims, after all, could have wide-ranging effects on how investors in many future fraud cases are treated. Given the globalisation of finance and investing, such cases are likely to affect the rights and legal responsibilities of investors everywhere, including many in the Gulf.