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01 March 2024

Funds for some Madoff victims

By Reuters

Some of the investors who lost money in an alleged $50 billion (Dh183.64bn) fraud run by Bernard Madoff may be able to recover funds within weeks, the president of the Securities Investor Protection Corporation (SIPC) said.

SIPC President Stephen Harbeck said he certainly hoped that some of the easier customer claims will be resolved "in the next few weeks".

Madoff's trustee has received 2,000 claims from Madoff clients, said Harbeck, who did not quantify the amount of lost funds. More than 8,000 claim forms were mailed to Madoff investors in January.

SIPC is a non-profit agency set up by Congress to maintain a fund to help investors who had accounts at brokerage firms that failed. The fund, supported by broker-dealer fees, has $1.6bn – a fraction of Madoff's purported fraud. Court-appointed trustee, lawyer Irving Picard, said in court last week that $946 million has been recovered so far from Madoff's firm to be disbursed to defrauded customers.

Harbeck said SIPC is working out details with the US Securities and Exchange Commission to ensure that the regulator agrees with SIPC and the trustee's methodology for resolving Madoff client claims. "Those negotiations are still ongoing," said Harbeck, who would not comment on the sticking points were.

Late in January, SIPC's board met to consider a number of issues, including whether the organisation needs to increase the fee it charges broker-dealers and whether it would have to seek different authority or funds from Congress.

Harbeck said some decisions will be made at SIPC's next board meeting, to be held this month.