Officials just announced that over $161 million has been approved for compensation payouts to 347 defrauded Bernard Madoff investors. The money is slated to pay advances of up to $500,000 per investor, considered a very small percentage of claims that total $1.02 billion, reported Newsday. The nonprofit Securities Investor Protection Corporation (SIPC) is handling payment distribution.
Astoundingly, the amount to be paid, thus far, in the Madoff scam is four times what was paid out in what is considered the next largest collapse of a securities company, noted Newsday, citing the Sunpoint Securities Inc. case that originated in 1999 in Texas. Total payouts in that debacle, including administrative expenses, totaled $34.7 million.
The 347 Madoff claims receiving advances represents a very small portion of the almost 9,000 claims filed to date, said Newsday, noting that SIPC is only covering a “fraction” of the losses. “This case is on a different order of magnitude, in terms of SIPC, than anything we have covered,” said agency president Stephen Harbeck, quoted Newsday. Investigators and officials differ on how the case will progress, with some believing that payout amounts will greatly increase while others state losses will end up being half of the $65 billion reportedly lost in the historic Ponzi scam, said Newsday.
Before his arrest late last year, the disgraced financier told his investors that his fund held more than $64 billion, but in reality, he only had a fraction of that amount. As we reported previously, Madoff never made a single trade on behalf of his investors. Madoff pleaded guilty to 11 criminal charges last March, including securities fraud, wire fraud, mail fraud, money laundering, and making a false filing with the U.S. Securities and Exchange Commission (SEC). At the time of his plea, Madoff publicly admitted he had run a Ponzi scheme. Madoff is being detained at the Manhattan Correctional Center in New York City, where he is awaiting sentencing scheduled for later this month. He faces as much as 150 years in prison.
The trustee appointed to liquidate Madoff Securities, Irving Picard, was appointed by SIPC and charged with locating and liquidating assets from Madoff’s investment business in an attempt to recover some funds for his defrauded investors. In recent months, Picard has filed several claw back lawsuits seeking a total of $10.1 billion in profits withdrawn by Madoff investors that he claims should have known of the fraud. Picard also is seeking about $735 million from Madoff customers outside of court.
Most recently, we wrote that bankruptcy cases involving Madoff will be consolidated in an attempt to save money and increase the chances that stolen assets will be recovered, citing an earlier Bloomberg.com report. This means one trustee will oversee Madoff’s personal bankruptcy, as well as another bankruptcy proceeding involving the admitted swindler’s business brought by the SIPC. In agreeing to consolidate the Madoff cases, a common trustee is believed to “maximize” the odds of asset recovery and avoid duplication of efforts, Bloomberg.com said. The judge involved also said that Madoff’s creditors would benefit from the consolidation “because SPIC is underwriting the costs of the recovery.” Picard backed the consolidation, the Associated Press said.
<You can leave a response, or trackback from your own site.
June 17th, 2009 at 4:52 am
Mr. Trustee stands to make 3% commission on the total amount he recoups and loses nothing on the people, especially the elderly, that he denies, illegally, according to SIPC rules and regulations, prompt SIPC reimbursement. He has also made up his own rules, fraudulent – regarding he is the almighty and when he so generously established the new hardship SIPC to expedite claims processing, he stated his ruling as to eligibility was final and no appeals or courts allowed by those people who filed. In addition, these people, and probably a significant amount because the hardship are the elderly, were in Madoff before 1996 and the hardship ruling states that pre 1996 investors filing for hardship must produce all deposits and withdrawals.
Mr Trustee Picard could make $90+ million for himself and leave the legally entitled people who qualify for SIPC out to die. A whopping 347 claims processed out of 9,000 in 6 months is disgusting and the judge should clawback all of Picard’s money $28,000,000 and get rid of him.