The Man Who Figured Out Madoff's Scheme
Tells 60 Minutes Many Suspected Madoff Fraud;
Says SEC Is Incapable Of Finding Fraud
March 1, 2009
It has been two and a half months since Bernard L. Madoff was picked up and charged with what is believed to be the largest financial fraud in history. Yet we still don't know much more about the alleged $50 billion scam than what Madoff initially told the FBI agents who arrested him. There are still no indictments as federal prosecutors continue to unravel the case and try to figure out exactly what happened and who was involved.
But the proof that it happened can be found in the ruined lives of thousands of victims. The one person who knows the most and is willing to talk about it is Harry Markopolos, the man who figured out Madoff's scheme before anyone else.
Markopolos sat down with 60 Minutes correspondent Steve Kroft for his only television interview.
Video here
Until a few months ago, Harry Markopolos was an obscure financial analyst and mildly eccentric fraud investigator from Boston who most people would never notice on the street.
But today he enjoys an almost heroic status, pursued by journalists and movie producers, and honored by colleagues as the man who went to the Securities and Exchange Commission and blew the whistle on Bernie Madoff and his $50 billion fraud.
But he seems uncomfortable with the attention, and knows that he is no hero. "I stand before you a 50 billion dollar failure," he said at an event.
Asked how many times he sent materials to the SEC, Markopolos told Kroft, "May 2000. October 2001. October, November, and December of 2005. Then again June 2007. And finally April 2008. So five separate SEC submissions."
"And in spite of all of the things that you did, it still ended up in disaster?" Kroft asked.
"There's nothing to be proud about in this case. I feel horrible about the result. It's been a total disaster for the victims," Markopolos replied.
It began a decade ago, when Markopolos was working for a Boston investment firm. His boss told him that Madoff, a former chairman of the NASDAQ stock exchange, was running a huge unregistered hedge fund that was producing incredible returns. He wanted Markopolos to reverse-engineer its trading strategy and revenue streams so the firm could duplicate Madoff's results.
"He had the patina of being a respected citizen. One of the most successful businessmen in New York, and certainly, one of the most powerful men on Wall Street. You would never suspect him of fraud. Unless you knew the math," Markopolos told Kroft.
"I mean, you're like a math guy, right?" Kroft asked.
"I've taken all the calculus courses, from integral calculus through differential calculus, as well as linear algebra. And statistics, both normal and non-normal," Markopolos said.
Asked how long it took him to figure out something was wrong, Markopolos said, "It took me five minutes to know that it was a fraud. It took me another almost four hours of mathematical modeling to prove that it was a fraud."
It was the performance line that Markopolos said caught his attention. "As we know, markets go up and down, and his only went up. He had very few down months. Only four percent of the months were down months. And that would be equivalent to a baseball player in the major leagues batting .960 for a year. Clearly impossible. You would suspect cheating immediately."
"Maybe he was just good," Kroft remarked.
"No one's that good," Markopolos said.
Markopolos said there were only two plausible explanations: either Madoff was using insider information to rack up the huge profits or he was running a giant Ponzi scheme.
"So either way, he was doing something illegal?" Kroft asked.
"Either way, I knew he was going to go to prison," Markopolos replied.
In May 2000, Markopolos took his suspicions about Bernie Madoff to the Boston office of Securities and Exchange Commission.
Asked if he had any financial motive, Markopolos said, "Yes. He was a competitor of mine in 2000 to 2004, while I was still in the industry. And when someone's competing on your playing field, who's a dirty player, you want him tossed off the field."
He also thought he might be eligible for a sizable reward if the fraud involved insider trading, but that turned out not to be the case.
"In your first letter to the S.E.C. back in 2000, you're a little tentative. You say, 'Look, I have no hard evidence, no smoking gun,'" Kroft remarked.
"In 2000, it was more theoretical. In 2001, it was a little bit more real. By 2005, I had 29 red flags that you just couldn't miss on. By 2005, the degree of certainty was approaching 100 percent," Markopolos explained.
Over time and with some simple math calculations, Markopolos concluded that for Madoff to execute the trading strategy he said he was using he would have had to buy more options on the Chicago Board Options Exchange than actually existed, yet he says no one he spoke to there remembered making a single trade with Bernard Madoff's fund.
"I would talk to the people I had trading relationships with and ask, 'Did you have a trading relationship with Mr. Bernard Madoff?' And they all said, 'No. We don't think he's for real,'" Markopolos said.
He said he found no one who ever had traded with Madoff. "And I traded with some of the largest equity derivatives firms in the world."
And that's because Madoff's investment fund never actually made any trades, at least going back to 1993, and probably further - a fact confirmed last week at a meeting of Madoff investors by the trustee charged with liquidating Madoff's assets. No one knew the depth of the fraud but a lot of people had questions.
"Who else figured this out besides you?" Kroft asked.
"I would say that hundreds of people suspected something was amiss with the Madoff operation. If you look at who the victims were not, you'll notice that the major firms on Wall Street had no money with Mr. Madoff," Markopolos said.
"I'm quoting from the letter to the Securities and Exchange Commission, red flag number 20. 'Madoff is suspected of being a fraud by some of the world's largest, most sophisticated financial services firms.' And then you list some of the firms," Kroft said. "The biggest firms on Wall Street. And conversations with people high up in those firms."
"That is correct. And the SEC ignored that," Markopolos said. "All the SEC had to do was pick up the phone. They never did."
"If you had executives at the biggest investment houses on Wall Street that knew something was wrong, why do you think they didn't go to the SEC?" Kroft asked.
"Because people in glass houses don't throw stones. And self regulation on Wall Street doesn't work," Markopolos said.
In January 2006 the New York office of the Securities and Exchange Commission finally opened a case file to look into Markopolos' allegations about Bernie Madoff. Despite uncovering evidence that Madoff had mislead them about his investment activities, the SEC closed the case 11 months later without ever opening a formal investigation. The staff said there was "no evidence of fraud."
"What I found out from my dealings with the SEC over eight and a half years is that their people are totally untrained in finance; they're unschooled; they're un-credentialed. Most of them are just merely lawyers without any financial industry experience," Markopolos said.
"Well, if the people there aren't trained in securities work, what are they trained in?" Kroft asked.
"How to look at pieces of paper that the securities laws require. They can check every piece of paper perfectly and find misdemeanors, and they'll miss all the financial felonies that are occurring because they never look there," Markopolos replied. "Even when pointed to fraud, they're incapable of finding fraud."
No one at the SEC would talk to 60 Minutes on the record about Markopolos' allegations. But one person who seemed to have had a high opinion of the agency was Bernie Madoff.
"I’m very close with the regulators so I’m not trying to say that what they do is bad. As a matter of fact, my niece just married one," Madoff said in 2007.
Besides his niece's husband, who left the SEC last year, Madoff had longstanding ties to agency and was called upon to give advice. At a 2007 meeting of a non-profit group called The Philoctetes Center, he seemed to think the SEC was doing a great job.
"In today’s regulatory environment, it's virtually impossible to violate rules. This is something that the public really doesn’t understand. But it's impossible for a violation to go undetected, certainly not for a considerable period of time," Madoff said.
Click here to watch the full video of the 2007 meeting at The Philoctetes Center.
But don't try to tell that to The Philoctetes Center today. Its main benefactor, the and Betty and Norman Levy Foundation, was fully invested in Madoff.
It is one of dozens of charitable organizations that have been devastated or wiped out. Madoff's customer list, single spaced with small type, is 162 pages long with victims running the gamut from Hollywood royalty to a carpenters' pension fund in Syracuse, New York.
Shelly Ludlow has been forced to put her mother in a Medicaid-assisted living facility while she packed up their apartment to move in with a friend. All because of Bernie Madoff.
"Our whole life has been turned upside down by this man that sits in his penthouse and smirks," Ludlow said.
The same day last week, 70 miles away, Len and Marge Forrest were leaving the house they just sold in Setauket, Long Island and were preparing to drive to south Florida to sell their condo there. They had their money with Madoff for 30 years and lost an eight-figure family fortune two days before his 80th birthday.
Len Forrest told Kroft he thinks they had enough money to live on for 60 days.
Asked if he knows other people who are in the same situation, Forrest told Kroft, "Oh yes, We have a lot-unfortunately. And I think probably the thing that tears me up more than anything is the fact that I recommended Madoff to a number of people .And they lost their money, and I'll never stop feeling responsible for that. They were all close family and friends."
Forrest and his friends thought they part of a small exclusive group of investors lucky enough to have a connection with Bernie Madoff, and because they thought they were making 12 percent a year, they were not inclined to ask a lot of questions. Harry Markopolos called it the classic affinity scam.
"An affinity scam is when you prey on groups that are similar in nature to yourself. So I'm Greek. If I was gonna run an affinity scam, I would run it on the Greek American community here," Markopolos explained. "Bernie was Jewish, so he ran it on the Jewish community in the United States. But that wouldn't get him enough customers, 'cause he always needed new money to keep the scheme going."
Over time, Madoff extended his reach from New York to Palm Beach, Fla., where he enlisted hundreds of wealthy clients, many of them recruited from his own country clubs. And he also made connections that gave him entree to Europe, and the hedge funds capital of America, Greenwich, Conn.
It was in Greenwich that Bernie Madoff made some of his biggest deals with large investment firms that were willing to feed him billions of dollars of their clients' money to manage. And in return, Bernie Madoff agreed to pay the so-called feeder funds a fortune in annual fees. The largest of the feeder funds was the Fairfield Greenwich Group.
"How much money did Fairfield make off Bernie Madoff every year?" Kroft asked Markopolos.
"Hundreds of millions of dollars," he replied.
"If you're a feeder fund or a fund of funds thing, what's your responsibility? What are you supposed to do for those hundreds of millions of dollars?" Kroft asked.
"You're supposed to identify the world's best hedge funds managers and invest only in them. And you're supposed to make sure they're not running Ponzi schemes," Markopolos said.
"The real steroids here were the feeder funds. That's what made it an international Ponzi scheme," attorney David Boies told Kroft.
Boies, one of the most prominent lawyers in the country, is representing Fairfield Greenwich investors, who lost nearly $7 billon when Madoff went under. They are suing the firm for gross negligence, claiming it failed to investigate Madoff thoroughly or monitor his activities as it promised to do in its marketing materials.
"Analysis of portfolio composition, portfolio stress testing, risk management, asset verification. Do you think that really happened?" Kroft asked.
"No. We know it didn't happen. Because we know all they did was turn the money over to Bernie Madoff. And they did that for 20 years," Boies said. "They essentially did nothing except lose their investors' money. And enjoy very luxurious lifestyles from the money they took out."
Walter Noel, one of the founding partners of Fairfield Greenwich, declined to talk to 60 Minutes and has been reportedly lying low with his wife at their compound on the private island of Mustique. But in a statement to 60 Minutes, his firm said it too was a victim of Bernie Madoff, that it had placed too much trust in his "then-impeccable…reputation" and in the fact that there had been "multiple reviews of Madoff by the SEC."
Click here to read the full Fairfield Greenwich statement.
In the end, Harry Markopolos had been right about Bernie Madoff. He will be going to prison, but not because of anything that Markopolos or the SEC did. In a bad economy, Madoff's lies simply collapsed under their own weight.
"No one was investigating Mr. Madoff at the end," Markopolos said.
"So he turned himself in before anybody, in a position of authority, began a serious investigation?" Kroft asked.
"That's typically how the SEC does it," Markopolos said. "They come in after the crime has been committed, they toe-tag the victims, count the bodies, and try to figure out who the crooks were after the fact, which does none of us any good.
Produced by Andy Court and Keith Sharman
© MMIX, CBS Interactive Inc. All Rights Reserved.
^^
I saw the interview. I do not even know where to begin in terms of expressing my anger ... it's beyond comprehension.
To quote Louis Black, " The people who ran these companies are the greediest group of fu^&rs ever. We know this because the Greediest of the greedy saw what this f*^ker did and said 'wow, that's really f*^king greedy' "
Well now his accountant is charged with fraud. Next his wife and sons
Yeah, the talk last week was that he couldn't have managed the fraud without help, and they were looking into his family and business associates.
Throw Fritzl and Madoff into a 6-foot cell together, throw up a webcam.
It's the closest we may come to blood-lust gratification in two sordid chapters of our contemporary world.
Madoff 'feeder' funds targeted by suits,
asset freeze
Fairfield Greenwich was 'blinded' by fees, Massachusetts alleges
By Alistair Barr, MarketWatch
Last update: 4:28 p.m. EDT April 1, 2009
SAN FRANCISCO (MarketWatch) -- So-called "feeder" funds, which funneled more than $10 billion of investors' money into Bernard Madoff's Ponzi scheme, have been hit by another lawsuit claiming they didn't do enough to spot problems, while one judge has ordered a temporary freeze on their assets.
Fairfield Greenwich Group, which ran one of the main Madoff feeder funds, was sued Wednesday by the Secretary of the Commonwealth of Massachusetts William Galvin.
The Massachusetts regulator said the complaint is based on "a profound disparity" between the due diligence Fairfield Greenwich told its investors it would do on Madoff's investment firm and the due diligence it actually conducted.
The suit alleges that Fairfield Greenwich earned hundreds of millions of dollars from its relationship with Madoff, making it less likely the firm would try to root out potential problems.
Galvin's investigation tried to find out "how Fairfield possibly could not have discovered the fraud during their eighteen-year relationship," the complaint said. "The answer, quite simply, is that they were blinded by the fees they were earning, did not engage in meaningful due diligence and turned a blind eye to any fact that would have burst their lucrative bubble."
Fairfield Greenwich said it will "vigorously" contest the allegations in the suit, which the firm called "false and misleading."
The complaint "is based on nothing more than 20-20 hindsight that supposes that anyone familiar with Madoff's operations should have determined that it was a Ponzi scheme," Fairfield Greenwich added in a statement. "The SEC, other regulatory agencies and every other investor in Madoff failed to detect his sophisticated fraud."
The suit also alleges misrepresentations to investors in Fairfield's Sentry funds about the firm's knowledge of and comfort with Madoff's operations. The Sentry funds invested almost all of their $7.2 billion in assets with Madoff.
The complaint is also based on what it called the lack of an arms-length relationship between Fairfield Greenwich and Madoff's firm, and the failure of Fairfield Greenwich to disclose the relationship.
"Fairfield's complete disregard of its fiduciary duties to its investors and its flagrant and recurring misrepresentations to investors rises to the level of fraud," according to the complaint.
Fairfield Greenwich said it conducted "vigorous and robust" monitoring on an ongoing basis of the Madoff investments.
"This monitoring was consistent with the representations made to investors in the Sentry funds," the firm added.
Madoff pleaded guilty to multiple criminal charges last month related to a Ponzi scheme which he ran for at least a decade and which grew to more than $50 billion.
A lot of the money Madoff controlled came from feeder funds like those run by Fairfield Greenwich and Tremont Group. Other firms which allocate client money to a range of underlying hedge fund managers were also involved, including Union Bancaire Privee, Banco Santander, Ascot Partners, Maxam Capital and Fix Asset Management.
Asset freeze
Earlier this week, Connecticut Superior Court Judge Arthur Hiller temporarily froze the assets of Fairfield Greenwich, Tremont and Maxam.
The order, in effect until April 13, also applies to Fairfield Greenwich executives Walter Noel, Jeffrey Tucker and Andres Piedrahita; Sandra Manzke from Maxam and Robert Schulman, who used to run Tremont with Manzke.
The asset freeze was ordered as part of a suit filed by the town of Fairfield, Conn., which lost a pension fund worth more than $40 million to Madoff's Ponzi scheme. The pension initially invested roughly $22 million with Madoff through Maxam, according to the Stanford Advocate newspaper.
"Tremont believes the claims in this complaint are wholly without merit and will vigorously defend itself," a spokesman for Tremont said.
A Fairfield Greenwich spokesman said the firm had no business relationship with the town of Fairfield, its pension funds or employees.
"Contrary to allegations in the Connecticut lawsuit filed on Monday, Fairfield Greenwich conducted extensive monitoring of its clients' investments with Bernard L. Madoff Investment Securities but, like others, was victimized by a sophisticated fraud," the spokesman added. "It is regrettable that the Connecticut lawsuit has been brought based on erroneous speculation."
Alistair Barr is a reporter for MarketWatch in San Francisco.
JAIL FOR DUMMIES
By KIERAN CROWLEY
April 13, 2009 -- Bernard Madoff's niece and another relative -- worried they'll wind up behind bars -- have contacted a consultant who teaches white-collar criminals how to survive in federal prison and secure early release, sources said.
A jail cell would be a stark change for Shana Madoff, who grew up on a six-acre Woodbury, LI, estate called Hastings Hall owned by her parents, Peter and Marion Madoff. Peter is Bernie's brother.
Shana, 38, who was a compliance officer with the infamous Madoff firm, contacted Larry Levine, a former federal prisoner and founder of Wall Street Prison Consultants, the sources said.
Levine refused to identify his clients, but admitted that "a female relative of Bernie Madoff contacted me" about taking his Fedtime 101 crash course. Shana contacted the company two weeks ago "because she was concerned about her safety" should she ever go to jail, one source said.
Shana "has been asking around what it's like to do time," another source said.
That source said she had contacted Levine "to learn how to game the system, so you end up in Club Fed, not Leavenworth.
"Shana was a compliance officer and signed a lot of documents, saying they were correct," the source said. "She may have a problem."
Levine said, "Another male member of Madoff's family also contacted me, independently" on the same subject.
He said a representative of Bernard had contacted him before the Ponzi scammer went to jail, but the rep's lawyers declined to let him take the course because his phone chats were being monitored. None of the Madoffs has yet sent money to Levine, he said.
"I give people a wakeup call," said Levine, who is still on federal supervised release after serving 10 years behind bars for counterfeiting securities. His course, which costs $850, also coaches future inmates on how to secure early release.
Shana did not return calls.
Meanwhile, a pair of Bernie's Mets tickets for today's home opener at Citi Field fetched $7,500 in an online auction that ended with all the drama of a walk-off home run.
The price soared in the eBay auction's final minutes, nearly doubling the $3,800 price listed just two hours before the 10 a.m. close, when a war broke out between two rival bidders.
http://www.nypost.com/seven/04132009...ies_164172.htm
People, who during the course of their lives, become more and more removed from the realities of human existence are bad enough; but their children and grandchildren, born into that insulation, are the true family buttheads.A jail cell would be a stark change for Shana Madoff, who grew up on a six-acre Woodbury, LI, estate called Hastings Hall owned by her parents, Peter and Marion Madoff. Peter is Bernie's brother.
Bernie Madoff, whose father was a plumber, went to high school in Far Rockaway. At least he has some connection to real life.
May 13, 2009
Records Show Billions Withdrawn
Before Madoff Arrest
By DIANA B. HENRIQUES and ZACHERY KOUWE
About $12 billion was pulled out of accounts at Bernard L. Madoff’s firm in 2008, according to several people briefed on an analysis of Mr. Madoff’s business records.
About $6 billion, or half, was taken out in just the three months before the financier was arrested in December and charged with operating an extensive Ponzi scheme, these people said.
Those figures offer a bit of hope for Mr. Madoff’s thousands of defrauded customers. Under federal law, the trustee overseeing the Madoff bankruptcy can sue to retrieve that money from the investors who withdrew it.
Indeed, the trustee, Irving H. Picard of Baker & Hostetler, filed two lawsuits on Tuesday seeking the return of a total of $6.1 billion, which he estimated had been withdrawn over the last decade.
One case seeks the return of $5.1 billion from various trust funds and partnerships run by Jeffry M. Picower, a prominent Palm Beach, Fla., investor whose charitable foundation was considered one of the notable victims of Mr. Madoff’s fraud.
Mr. Picard also sued to recover $1 billion withdrawn last year by Harley International, a hedge fund based in the Cayman Islands and administered by a unit of the Dutch bank Fortis.
Both lawsuits were filed in Federal Bankruptcy Court in Manhattan. And both assert that the defendants, as professional investors, should have realized that their profits were too high and too consistent — and Mr. Madoff’s paperwork and procedures were too sloppy — to be legitimate.
But the complaint against Mr. Picower goes further, accusing him of participating in a web of transparently false transactions with Mr. Madoff that were aimed at compensating him for “perpetuating the Ponzi scheme” at the expense of other investors.
In 1999, for example, one of Mr. Picower’s accounts posted an annual profit of more than 950 percent, the suit said. That account was one of two that reported annual returns from 1996 to 1999 ranging from 120 percent to more than 550 percent, the suit said.
In other accounts, backdated transactions generated billions of dollars of fictional year-end losses and one account grew by 30 percent in just two weeks in 2006 — thanks to trades that purportedly occurred months before the account was even opened.
A lawyer for Mr. Picower and his wife, Barbara, who was also named as a defendant, denied the allegations.
“Mr. and Mrs. Picower considered themselves friends of the Madoffs for over 35 years,” said the lawyer, William D. Zabel of Schulte Roth & Zabel. “They were totally shocked by his fraud and were in no way complicit in it.”
Mr. Zabel added: “They lost billions in personal assets, and most dear to them, all of the assets of their esteemed foundation.” The Picower Foundation closed its doors after Mr. Madoff’s arrest.
According to people familiar with the analysis of Mr. Madoff’s cash records, most of the $12 billion that flowed out of his fraudulent money-management operation last year was withdrawn by various “feeder funds,” which had raised cash from investors and pooled it to invest with Mr. Madoff.
Several of those feeder funds have already been the targets of lawsuits by Mr. Picard, who is searching for assets to be shared among customers who lost what they believed to be almost $65 billion in the Ponzi scheme.
It is not clear where the cash taken out of the Madoff accounts is located, or how much of it can be recovered through litigation.
In the lawsuit seeking to recover more than $1 billion withdrawn by Harley International, Mr. Picard asserts that the fund should have detected the fraud before investing more than $2 billion of its clients’ money.
According to that complaint, Harley International made 14 transfers out of its Madoff account over the last six years, including $425 million that was withdrawn three months before the Ponzi scheme became public.
A spokeswoman for Harley International, Jamie Moss, did not return calls seeking comment.
In the complaint, Mr. Picard said Harley International, which invested client money with Mr. Madoff since at least 1996, received “unrealistically high and consistent annual returns” of about 13.5 percent. That outpaced the swings in the stock index on which Mr. Madoff had apparently based his trading strategy.
Trading records indicate that the Madoff firm, Bernard L. Madoff Investment Securities, made at least 148 stock trades in Harley International’s account in the last decade at prices that did not match the trading range for those stocks on the dates the trades supposedly occurred.
Mr. Picard claims those trades should have raised red flags for “any investment professional managing the account.”
The Harley lawsuit is similar to one Mr. Picard has filed recently against J. Ezra Merkin, the New York financier who lost over $2 billion investing with Mr. Madoff.
The lawsuit against Mr. Picower mirrors similar allegations Mr. Picard made in a complaint against Stanley Chais, an investment manager and prominent Los Angeles philanthropist. Both investors have said they intend to fight the lawsuits.
Mr. Picard has raised about $1 billion in assets for Mr. Madoff’s victims, but the lawsuits filed in the last two weeks could push that number much higher.
Mr. Madoff pleaded guilty on March 12 to running the biggest Ponzi scheme in history. He is scheduled to be sentenced next month and faces 150 years in prison.
Copyright 2009 The New York Times Company
There was a great Frontline Report on PBS tonight about this. Those withdrawals were what led to the unraveling of the scheme. He could keep the cash comingin fast enough to pay the investors seeking to pull out.
I read that Madoff has consented to pay 170 billion dollar, assets seized.
170 BILLION?
Madoff's base of operations were in Turtle Bay, you can see a diagram of his headquarters here from the WSJ complete with interactive map of all of the computer terminals, key departments of his operation etc which I posted on SleepNY here.
170 BILLION?
Last edited by Gregory Tenenbaum; June 27th, 2009 at 02:17 PM.
Relax. Its a typo. It should read - 170 MILLION.
Editors and Fact Checkers were apparently the first to go in the Great Recession.
Fraudster Madoff gets 150 years
From BBC
Bernard Madoff has been given a prison sentence of 150 years for masterminding a massive fraud that robbed investors of $65bn (£40bn).
US District Judge Denny Chin sentenced Madoff on 11 charges, including securities fraud and money laundering.
Madoff's lawyer had sought a more lenient sentence of 12 years.
The maximum sentence came after the court heard emotional statements from a number of his victims about the fraud's impact on their lives.
Ahhh... the avarice here is mind-boggling. The moment the Maddoff scheme broke and the sob-stories of all the poor (minimum investment to get into the fund was $1,000,000) Maddoff victims hit, I predicted this would happen:
The "victims" have been furiously lobbying to have not only their initial investment covered by SIPC, but their fake profits, as well! To the tune of $64 billion. To be paid for by the American taxpayer.
SIPC is only supposed to insure up to $500,000, but the "victims" want to bust through that ceiling and are arguing that the amount to be recovered ought to be whatever their last statement read - regardless of any withdrawals made prior to the scheme breaking!
So if a "victim" put an initial $3,000,000 into fund in 2002 and his final statement (prior to Maddoff's arrest in 2008) read $6,000,000 - he is due the initial investment AND the 100% return on investment from the Congressionally-created SIPC. SIPC is supposed to be broker-funded - but it has nothing close to the amounts that are being demanded by the "victims."
It is one thing to seek a conservative annual return for one's lost nest egg (based on Treasury paper), but the greedy filth think the Maddoff-Ponzi annual returns (12%-16% annual) are their just due.
http://blogs.bnet.com/ceo/?p=3643
http://blogs.trb.com/business/column...th_florid.html
RS, sadly, in law you never state what you actually want to get, because chances are you will never get it.
I think the people are entitled to get their cash back, and those that made a profit on it should pay up (although not all at once). I can't see a 100% payback on this, even the ones that made money cant be held fully responsible for the first few weeks/months of profit, but their own suspicions should have been aroused when they were rating so far above every other investment scheme available.
BTW, even though you needed $1M to get in, I heard there were GROUPS that invested, not just individuals. So if 20 people close to retirement got together and plunked $50K down each, you say "boo hoo they got what they deserved"?
I do agree that, at least in the real world, asking for your final investment statement to be paid in a case like this is not, well, realistic. But, lets face is, since when is Law "reality"?
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