Bernard Madoff continues to make headlines all over the world but an interesting case made the headlines this week. As you will some 50 billion US Dollars has gone walkabout from investors all over the world, including large numbers of charities and public authorities. The joint provisional liquidators of the English company applied under section 112 of the Insolvency Act 1986 for various directions relating to the transfer of data which is or might be regulated by the Data Protection Act 1998. The DPA at section 4 of the Act refers to the data protection principles set out in Part 1 of Schedule 1 to the Act with which a data controller must comply.
The eighth of those principles is that:
” Personal data shall not be transferred to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data. “
It is common ground that the United States of America are outside the European Economic Area, and it is common ground that the United States or New York State does not ensure an adequate level of protection for the rights and freedoms of data subjects, as that principle should be interpreted.
Exceptions to the eighth principle are set out in Schedule 4 to the Act.
Schedule 4 paragraph 4(1) disapplies the eighth principle where:
“The transfer is necessary for reasons of substantial public interest.”
The liquidators have both said that in their opinion the transfer of the information is necessary in order to unravel the alleged fraud and what has happened to the assets which have been invested in the Madoff empire.
As a result the courts were satisfied that it was in the public interest for an alleged fraud on this scale to be pursued and of this complexity to be investigated, and the evidence before me it the courts were satisfied that transfers of the information were necessary for reasons of substantial public interest.