The stink of anything Madoff-related has gotten at least two of the banks that set up "feeder funds" for him to challenge a court order to protect their employees from reprisals.
UBS and Citibank are already under fire from the trustees for Madoff's victims, who claim that the banks helped push clients to Madoff and then turned a blind eye to his crimes.
However, both banks are refusing to comply with the trustees' demand that they turn over unedited documentation of their Madoff relationships that could compromise the safety and careers of employees who were only following orders.
None of the employees has been named in any lawsuits, so they are not personally liable for any wrongdoing. But simply being connected to the rotten Madoff name in the media is now apparently enough to wreck lives.
There's nothing I can really say here that hasn't been said, except maybe to underline the point that there's so much blame in the Madoff affair that everyone involved -- from SEC lawyers who inherited and sold Madoff units to the wirehouse backoffice staff who worked the accounts -- has had fingers pointed at them.
The question of just how complicit the wirehouses who ran the "feeder funds" were remains to be seen, but the high-net-worth market may well render its own judgment -- by voting with its feet.
What's to stop a bank that pushed its innocent clients into bad funds once from doing it again? It's good to protect your staff, but clients want to be sure that you'll protect them above all else. After all, that's the fiduciary ethic in a nutshell.