Madoff investors' lawsuit against SEC thrown out

April 19, 2011 4:56 PM EDT

A federal judge dismissed a lawsuit by two of Bernard Madoff's former customers accusing the U.S. Securities and Exchange Commission of negligence for failing to uncover the now-imprisoned swindler's Ponzi scheme.

U.S. District Judge Laura Taylor Swain said the plaintiffs failed to identify any statute or rule governing how the SEC should have been investigating Madoff prior to his December 2008 arrest.

Howard Elisofon, a lawyer for the investors, said he was disappointed with the ruling, and is talking with his clients about their next step.

An SEC spokesman did not immediately return a phone call seeking comment.

(Reporting by Jonathan Stempel; Additional reporting by Grant McCool, editing by Gerald E. McCormick)

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