Did Madoff Buy Any Stock?
Disgraced money manager Bernard L. Madoff might not have used any of his clients' billions of dollars to buy any securities for 13 years, according to the man tasked with finding the former Nasdaq chairman's remaining funds.
Irving Picard, the court-appointed trustee charged with selling off Madoff's assets to raise funds that could be distributed to his victims, met with investors, in tow with their attorneys, at a 300-seat auditorium of the historic U.S. Customs House in lower Manhattan, which now houses the federal bankruptcy court.
"Welcome to the first meeting of Bernard creditors," he said to start the meeting, which was listened in to by other investors and observers by phone. Then, a few moments later, the bombshell:
"For some substantial period, perhaps as much as 13 years, no securities were purchased in client accounts," Picard said.
So what does that mean for duped investors in Madoff's suspected $50 billion Ponzi scheme?
Picard said he has been able to recover roughly $650 million so far from Madoff's holdings, including funds in foreign and domestic accounts. Investors can also apply to collect up to $500,000 from the federal Securities Investor Protection Corp., which controls a type of reimbursement fund.
But of the $23 billion in losses reported by investors so far in mid-December, more than half came from those who invested in Madoff through feeder funds, Time magazine noted. Those types of investors aren't typically eligible for the federal securities insurance program.
(Picard said today that 2,350 claims have been processed so far and they expect the number of claims to double, The Associated Press reports. If the claims doubled and each investor got an equal share of the $650 million collected so far, it would work out to $138,300 per claimant.)
There are some other legaly avenues for aggrieved investors: They could file lawsuits against Madoff, his firm or the bevy of firms who "sold access to Madoff's asset-management business."
And some experts say there's still hope more money may be found. ABC News announced plans to air a program tonight about a possible $10 billion in secret Madoff holdings in Switzerland and Africa.
By Derek Kravitz |
February 20, 2009; 12:03 PM ET
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