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 ...
“Two words for these sad & sorry investors; Tough $hit.”
no no...that’s if *we* were in charge. They will probably do a little song and dance and will get bailed out, just like everyone else these days.
I have no idea if they are covered or not.
“We lost our life savings,” said investor Joan Sinkin.
heard of something called an index fund?
oh you wanted to do better than the market? yeah...just like everyone else.
I lost my damn wallet. It had $50k in it. I set it on top of my car and drove 50 miles on the freeway and when I got home, it wasn’t there! I want $50k from the government.
I'm guessing that the brokerage was the supposed custodian of assets for his advisory business clients. Presumably that would give the accounts the 500K coverage if the brokerage is a member of SIPC, which apparently it is.
It IS horrifying what passes for journalism in this country today. Airhead reporters spewing a rehash of DNC talking points and they can't even get them right!
Out here in knuckle dragger country we have a saying too: "Never put all of your eggs in one basket."
Oh, come on! That has to be worth at least $3 billion!
Somewhere in there, the folks who pay their taxes, their mortgages, and their bills will be royally screwed. The money has to come from somewhere.
I used to think imaginary talk on this board about a Revolution in this country someday being an insane proposition. I still don't think we are there.....yet.
Looks like the Judge in this case didn't get the memo.........
That'd be fine but it seems these greedbags want it back with 12% interest.
“the moneyed, left wing elite always get a do over.”
correction: “the moneyed, sneering, supremely brilliant, hubris-laden, left-wing elite always get a do over.”
(is it possible that all those brilliant people didn’t know that medoff was operating a scheme rather than an investment?)
With all the crooked/stupid democraps in the Senate getting huge campaign contributions from this crook, and some even having ‘invested’ with him, it’s a safe bet that they will stretch the SIPC rules to cover this bailout too! (After being exposed as a recepient, Chuckie said he’d return his - ain’t that spaashell!)
P.S. from the SIPC website:
“Funds froim SIPC cannot be used to pay damage claims based on fraud.”,
“does not protect you against fraud”,
“SIPC differs from the Federal Deposit Insurance Corporation, which insures all depositorsof failed banks against loss up to a certain dollar limit. SIPC does not bail out investors but rather replaces “missing stocks and other securities,” when a brokerage is closed. SIPC typically will go to a federal judge and request a trustee be appointed to liquidate the firm.”
Can’t you just see all those people at the Palm Beach Country Club, with their noses in the air, drinks in hand, pinkie fingers stuck out, etc... Too bad, you idiots - those suckers who believe in personal responsibility may win yet!!!
Here is a simple solution to this which if instituted would solve this problem in a heart beat! The broker has to cover by insurance all investments against schemes. If an investor puts up one million the broker has to buy one million of insurance against fraudulant loss. The investor is garaunteed principle from loss by fraud. Then define what constitutes “fraud” in the contract.
Wow!
Are You Rich Enough to Invest in a Hedge Fund?
The government wants to make it harder for people to invest in these sometimes-risky investment funds.
By Matthew Mogul, Associate Editor, The Kiplinger Letter
May 23, 2007
The SEC will soon raise the bar on who can put money into a hedge fund. Not since 1982 has the Security and Exchange Commission adjusted the wealth standards for accredited investors -- those permitted in hedge funds. As a result, it still takes $1 million in net worth or $200,000 in annual income for individuals ($300,000 for couples) to be eligible.
When those limits were set 25 years ago, only 1.9% of U.S. households qualified as accredited investors, and there were only a few hundred funds to track. Today, some 9000 hedge funds exist worldwide, and because of inflation and the rapid rise of newly minted millionaires, about 8.5% of U.S. households qualify. The broader accessibility to the funds, known largely for their volatility, has sparked concern at the SEC that more and more accredited investors might not have the financial wherewithal to withstand potential losses.
New rules out by year end will limit hedge funds to about 1.3% of households by requiring people to have at least $2.5 million in assets, excluding equity in a home or business, in order to invest. The shrinking universe of eligible investors will force smaller funds to shut. The 500 biggest funds control 80% of all assets and rely mainly on institutional investors, such as insurance companies and endowments, for funding. The rest are left to compete for wealthy individual investors. And that'll get much tougher when the new rules take effect.
But close regulation of hedge funds is not likely. Sen. Chuck Grassley (R-IA) is pushing for stricter oversight of funds, similar to a proposed SEC rule that was struck down by a federal appeals court last year, but his bill isn't likely to pass.
Though lawmakers are interested in corralling hedge funds, everyone from former Federal Reserve Chairman Alan Greenspan to Treasury Secretary Henry Paulson to the White House has come out against it. What's more, Grassley's bill would have to go through the Senate Banking Committee, chaired by Sen. Christopher Dodd (D-CT). The majority of funds worldwide are headquartered in his state, and in the past, he has called hedge funds a "tremendous wealth-creation vehicle."
I think they have to be a member that would, no doubt, include some sort of payment. But, why have something so simple when the government is always there to bail them out!
This would really tick me off if these idiots get our money - particularly after having spent the past year with all our funds in treasury paper and are now nearly paying the government for the privlege of being personally responsible.
This whole thing really sucks - my ‘run-in’ with the UAW occurred when I met a high school dropout who retired from GM at age 54 at full pay, unbelievable health benefits for the entire family (full medical, eye, dental, etc), plus annual bonuses. Why in the world should those taxpayers who can’t afford health insurance, pay for their gold-plated plans!
It would be great if Bush would tell them to go scratch - but then he has really turned into what the democraps have said he is/was.
The hedge funds have just about taken over the stock market - small traders and investors are at the mercy of those gunslingers who act as a group to stop the little guy out of trades. The universe would be well served if they all went under. It will be interesting to see how these sharpshooters will react to redemptions (many have already postponed them) and how many have been involved in fraud.
So all those people who took the bait from the Nigerian scammers, they’re getting a bailout too right?
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