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.
SIPC protection is primarily designed for the smaller investor, not the Madoff types who invest millions.