* Judge finds public right of access to names
* Banks feared employees would be stigmatized
NEW YORK, April 12 (Reuters) - The judge overseeing the liquidation of Bernard Madoff’s investment firm on Tuesday rejected requests by banks to keep secret the names of current and former employees mentioned in lawsuits seeking to recover alleged improper profits tied to the imprisoned Ponzi schemer.
The public disclosure of names of workers affiliated with financial institutions including Citigroup Inc (C.N), JPMorgan Chase & Co (JPM.N) and UBS AG UBSN.VX was ordered by U.S. Bankruptcy Judge Burton Lifland.
These names were used in lawsuits filed by Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, to recover money for former Madoff investors, but the names were redacted from publicly distributed versions of the lawsuits. Picard has filed more than 1,000 lawsuits seeking to recover roughly $100 billion.
Banks countered that disclosure was unnecessary, and could stigmatize the employees or suggest misconduct.
“The public has a qualified First Amendment right to access certain judicial documents,” and the federal bankruptcy code “creates a strong presumption that court records in bankruptcy proceedings are accessible to the public,” Lifland wrote.
“At bottom,” the judge added, “the defendants have not adequately established any harm beyond merely embarrassing or prejudicial association with these Ponzi scheme proceedings.”
Lifland did allow JPMorgan to keep under seal information concerning its “know-your-customer” and anti-money laundering procedures.
The trustee is suing JPMorgan, Madoff’s main bank, to recover $6.4 billion.
Representatives of Citigroup, JPMorgan and UBS did not immediately return calls seeking comment.
Picard himself had opposed a broad-based ruling to keep names secret.
“Other than when an individual is named as a defendant, it is the institution which is charged with liability for its role in turning a blind eye to indicia of fraud,” his lawyer, David Sheehan, wrote in a March 18 letter to Lifland. “Individuals played a variety of roles, including that of apprising others of potential fraud at BLMIS. Under these circumstances, a blanket ruling that all identities should remain redacted does not appear warranted.”
The case is In re: Bernard L. Madoff Investment Securities LLC, U.S. Bankruptcy Court, Southern District of New York, No. 08-01789. (Reporting by Jonathan Stempel; Editing by Gary Hill)