Sage argued it should have been calculated using the amounts shown in the fraudulent account statements, but the Second Circuit upheld the use of NIM in August 2023, citing its own 2011 decision allowing its use in the Madoff case.
Sage argued in his certiorari petition the federal Securities Investors Protection Act under which Picard was appointed contains no authority for using the NIM method, and even if it did the Second Circuit’s 2011 “net equity” ruling said the use of NIM was allowed because Madoff claimed to be making stock trades on his own initiative. Sage said while this was the case for one of his accounts, he was directing the trades on the other account.
