Posted on 12/15/2008 4:35:43 PM PST by Sub-Driver
Madoff Investors May Be Protected By Government
Reporting John Slattery NEW YORK (CBS) ― Federal investigators remain at the investment offices of disgraced investor Bernard Madoff, scouring through records to learn the scope of what may be the biggest Ponzi scheme ever in the United States.
The numbers are staggering, the losses far-reaching.
The scheme was operated out of the so-called "Lipstick Building" on Third Avenue. Bernard Madoff Investment Securities LLC occupies three floors and may have bilked investors of $50 billion.
Prosecutors say it was a classic Ponzi scheme. The firm paid-off earlier investors with money from new investors. It collapsed amid a nervous economy when some people wanted their money out.
"I believe he was a polished, polished, highly sophisticated schemester," said investors' attorney Mark Mulholland.
Mulholland's Long Island firm represents some 100 investors that could grow to several hundred who claim they lost millions.
"University endowments, pension funds; the scope seems to be limitless and affects little people too," says Mulholland.
In addition to publisher Mort Zuckerman; Fred Wilpon, owner of the Mets; former Philadelphia Eagles owner Norman Braman; there were the modest investors who put their faith in Madoff.
"We lost our life savings," said investor Joan Sinkin.
Brooklyn transplants to Florida, Sinkin and her husband Arnold said they lost 85-percent of a nearly $1 million investment.
"We were able to do things to enhance our retirement. Then in 72 hours, we were bankrupt," she said.
(Excerpt) Read more at wcbstv.com ...
OMFG.
WTF is wrong with America? I’m going to scream, too. SIPC should not cover this. What a #$!%#@# crock.
SIPC on CNBC.. Can give investors up to 500k each...
WHY???
I don't put large chunks in any one basket. I thought that was Investing 101.
It’s just an insurance policy that pays $500K per account. Pennies on the dollar...
Said his ponzi scheme is considered “a brokerage”
TOTAL BS!
“Brooklyn transplants to Florida, Sinkin and her husband Arnold said they lost 85-percent of a nearly $1 million investment.”
“I don’t put large chunks in any one basket. I thought that was Investing 101.”
That’s for us commoners. :)
How much does the Madoff family have in overseas accounts? Can they be liquidated?
It’s hard to see what would be covered in this ponzi scheme. Since the accounts probably never had any stock owned in them, to what are protected investors entitled? Maybe up to $500,000 of their original investment, but the compounded fraudulent returns? Seems hard to support that.
moreover, anyone who redeemed money out of the fund or closed a managed acct should not be spending that money yet as it will probably get clawed back as a fraudulent conveyance.
As for the 3:1 levered goofballs, they are toast. Thanks for playing. Maybe do a little due dilli next time. - Or: f you think you’re benefiting from someone’s cheating of someone else, think again.
EXCERPT Madoff was single-handedly managing billions of dollars in offices he kept separate from the rest of his firm........The only oversight was conducted in a Rockland County accounting office only slightly larger than a cubicle. The firm's main office was in NYC.
Madoff made his fortune embracing the latest and best technology, BUT he forbade investors to get online access to their accounts, insisting instead on paper printouts....
For well over a decade, competitors and experts said they found Madoff's track record suspicious. He seemed immune to any volatility in the market and, no matter what was happening in the economy at large, managed to finish each month with almost identical profits. . Madoff dismissed attacks as envy and said critics simply did not understand the complexities of his strategies.
Aksia LLC was hired to investigate Madoff several years ago, said principal Jake Walthour. The probe only increased the concerns about the fund. Madoff's returns were "abnormally smooth" from month to month, and it seemed impossible to replicate his investment strategy or verify his track record.
Madoff claimed to be moving as much as $13 billion in and out of the market every month, but "no one on the street could verify it or even see his footprints," Walthour said. "That organization was incredibly secretive." When they staked out the tiny accounting firm no one had ever heard of, investigators concluded something was amiss. "We decided there are several scenarios here, one of which is, this could be a Ponzi scheme," Walthour said.
Those who have invested in the fund have told investigators that withdrawing cash from it was an arduous process that involved faxes and inexplicable delays. That's because in a Ponzi scheme, money from new investors is used to pay those seeking to withdraw their money.
SOURCE Bloomberg and NY Post wire reports
http://www.nypost.com/seven/12132008/news/regionalnews/alarm_bells_in_1999_ignored_143971.htm
Two words for these sad & sorry investors; Tough $hit.
So what's the uproar about? A securities firm's accounts are protected by SIPC? That's what the fund is for.
Members of SIPC maintain separate accounts in trust and are therefore easily transferable and frequently audited. This MADOFF Hedge Fund is a whole different creature. Unregulated and not covered by SIPC.. Activist Judges will blow wind on this and only make a stink. The funds gone and nobody but Madoff and his estate owes them a thing.
where it gets muddy, of course, is that the fund probably had accounts at Madoff...
“Two words for these sad & sorry investors; Tough $hit.”
Sorry about your luck and your decision making process adversely affected by greed.
That is a gray area. Due Diligence standards failed miserably in allowing this rotten manager in the tent. God’s hand is clearly at work through out this mess. If you humble yourself to the market, it will exault you & visa versa. God is pruning some and throwing others into the fire pits of hell. Both the arrogant and ignorant are in for a severe humbling.
No Hedge Fund Left Behind!
Maybe we are both lucky observers watching a tragedy unfold. Sympathy, it is in the dictionary between that word and syphallis. Justice is now served and how swift and terrible it is.
They're dems, right? The gov will pay them and the MSM won't miss a beat in backing them.
The money has to come from somewhere - maybe your family can cough up your share for the uber rich limo libs... Your child can skip going to college - these guys need new private jets.
The little people will be the excuse - but trust me, it's the very rich liberals who will be bailed out. Give up social security - the rich liberals want new yachts.
SIPC protection is primarily designed for the smaller investor, not the Madoff types who invest millions.
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