Over USD61m of Securities Investor Protection Corporation funds has already been committed to 125 claimants in the Securities Investor Protection Act liquidation proceeding for Bernard
Over USD61m of Securities Investor Protection Corporation funds has already been committed to 125 claimants in the Securities Investor Protection Act liquidation proceeding for Bernard L. Madoff Investment Securities.
Irving H. Picard, the court-appointed trustee, and SIPC president Stephen Harbeck, say the commitment of SIPC funds is expected to reach or exceed the USD100m level by Memorial Day.
A total of 8,848 customer claims have so far been filed in connection with 3,565 customer accounts at Bernard L. Madoff Investment Securities. SIPC maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms.
Picard and Harbeck say forensic accounting experts and legal teams are working as quickly as possible to catalog all of the far-reaching aspects of the Bernard L. Madoff Investment Securities investment fraud scheme, recover all available assets and make payments to investors, as provided for under the terms of SIPA.
Harbeck says: "This is an unprecedented undertaking, but I believe that we can now say that we are at ‘the end of the beginning’ in this incredibly complicated case. Since its inception, SIPC has commenced 322 proceedings. Cash and securities totalling approximately USD160bn have been distributed to customers in those proceedings. Of that amount, approximately USD159.7bn came from the debtors’ estates and USD323.8m came from the SIPC Fund. As these numbers make clear, much of the work done by every trustee and his or her counsel is identifying and gathering the assets of the member and distributing them in a fair and equitable way to all customers of the failed brokerage."
Picard adds: "I cannot listen only to the pleas of those investors who are demanding preferential consideration in this process. The Trustee has been urged by some, but certainly not all, claimants to use the last monthly statement issued by Bernard L. Madoff Investment Securities as the basis for his determination of customer claims. To do so would benefit longer term customers at the expense of shorter term customers. It would allow a certain favored few who received compounded annual returns at substantially higher rates than other customers to also benefit. This would in effect allow Bernie Madoff to determine which entities would get a larger proportion of customer property. This would do extreme prejudice to persons who put cash into the scheme relatively recently. That may be fine for those investors who would benefit disproportionately from such an approach, but it is not what fairness and Congress dictate in this situation."
