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Household Finances

Will Madoff's Clients Get SIPC Help?

17 years ago

Well...that's my question. Also, how 'drained' will SIPC be if it does pay out huge amounts on this and others?

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Comments (6)

qdognj
17 years ago
Madoff should be jailed ASAP,not be "home detained" in his high-end NYC Apt...Getting to the OP,if it is "law" that the clients get SIPC help,then much to my chagrin,it'll be done...While some investors got "Madoffed" by investing in funds of funds,others willingly gave Madoff their assets,happily taking 1-2% per month during some of the worst market corrections,2001,2008..Ya think for 1 minute ya might question how the heck this is possible? GREED!!!!
duluthinbloomz4
17 years ago
The short answer is "yes". But, there will be a fair number of "buts".

From a Dec.16, 2008, ING news item...
...a federal judge on Monday threw a lifesaver to investors who may have been duped, saying they need the protection of a special government reserve fund set up to help investors at failed brokerage firms.

U.S. District Judge Louis L. Stanton ordered that clients of Madoff's private investment business seek relief under a federal statute created to rescue cheated investors. Stanton also ordered that business be liquidated under the jurisdiction of a bankruptcy court.

SIPC President Stephen Harbeck said in a statement that the fund's task will be harder than in other bankruptcies because of the size of the misappropriation and the condition of the defunct firm's records.

From its inception through December 2007, the SIPC has advanced $507 million and made possible the recovery of $15.7 billion in assets for an estimated 626,000 investors.

I'm truly amazed at the callous disregard someone like Madoff can display - the latest folly of mailing off jewelry and assets (said to be a million plus in value) to relatives and friends. His lawyer claimed they were mere "trinkets". I'd really like to see this guy wearing a striped suit and pounding sand for the rest of his natural life.

It could well be that the amount of Madoff's fraud may shrink a little from the 50 billion - still staggering despite any shrinkage. Would have to be determined what was actually given to Madoff for investment without the years of faked gains added on. If I sent Madoff a check for 1m and my statement eventually reflected a "faked" value of 1.5m, it would be doubtful I'd be able to claim the extra half million.

I suspect if all else fails, we'll be hearing a lot about nailing him under the RICO statutes. Seems to work with other rackateers.
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jakkom
17 years ago
Adding to the confusion, I believe Madoff was not actually a broker until 2006.
duluthinbloomz4
17 years ago
There's so much ink on this to sift through - and asking Google a direct was Madoff a licensed broker brings up everything but a direct answer. But the Bernard L. Madoff Investment Securities LLC was started in 1960. Could he operate a securities business that 'supposedly' did make trades and offered more than investor advice without a license? Even though I don't understand how, I have to believe anything's possible.

For years and years, could he have carried on a "pay for order flow" - where an actual broker would be paid to execute a customer's order through Madoff? Maybe, because at this juncture, no one knows what the trades were (of if there were actually any trades) or exactly who was making them.

But according to an item in TIME, and I paraphrase, Madoff's investor scouts were likely unlicensed to trade securities, but ran Madoff's webb of domestic and international feeder funds, which in turn generated their own sub-funds. It was into the sub-funds many private investors, foundations, schools and other endowments poured their money.
joyfulguy
17 years ago
Anybody know where we can find some extra-thick wallpaper ...

... with plastic coating, to hide the smokey smell?

ole joyful

P.S. "You ask me no questions ...

... I'll tell you no lies".

o j (not juiced, today)
User
17 years ago
I personally do not care who pays for what as long as it isn't me.

I didn't force people to buy homes they couldn't afford but I am paying for it. I also didn't force rich people to trust Madoff or the other Ponzi guys going down.

At some point personal responsibilty has to come into play.

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