 |
An investor agency said the approvals represent ‘major progress’ to pay Bernard Madoff’s victims. |
Madoff claims of $231m OK’d for payment
NEW YORK - The Securities Investor Protection Corp., the government-chartered agency liquidating Bernard Madoff’s defunct business, said it committed $231 million from its reserves to pay 543 claims by the con man’s victims.
The agency, known as SIPC, said yesterday the same claimants were approved for up to $2.74 billion in future payments, depending on how much is recovered in the wake of Madoff’s $65 billion Ponzi scheme. The 543 are the first of about 12,000 claims evaluated on up to 4,000 accounts.
The approvals disclosed yesterday represent “major progress’’ in the effort to pay victims for their losses, SIPC president Stephen Harbeck said, even as more customers complained about the agency’s evaluation of their claims. The victims can get up to $500,000 each from SIPC, more if the trustee, Irving Picard, recovers enough assets.
“There’s been a rush of claims toward the end,’’ Harbeck said in an interview. “We’re encouraging everyone to file claims. As the trustee gets records from prior to 1995, he’ll be able to speed the process.’’
Today is the deadline for filing claims.
Madoff, 71, pleaded guilty in March and was sentenced two days ago to 150 years in prison for using money from new clients to pay earlier investors. Trades reported for years on customer statements were never executed, according to Picard.
Besides filing suits, Picard has asked hundreds of victims to voluntarily return fictitious profits from Madoff’s firm, New York-based Bernard L. Madoff Investment Securities LLC.
Picard, a lawyer at Baker & Hostetler LLP in New York, has been sued in turn by some victims for calculating each investor’s loss by subtracting withdrawals from deposits in what he calls a net-equity formula. Hundreds of victims argue that, under federal law, claims must instead be based on their final account statements including bogus returns.
One of the victims is Donald Benjamin, 76, of New York, a former owner of car dealerships who says he lost more than $20 million in Madoff’s fraud. Last month he rejected SIPC’s offer of $229,000, saying he would take nothing less than the full amount of $500,000 allowed by the 1970 Securities Investor Protection Act, which created the agency.
Helen Chaitman, a Madoff victim and lawyer who sued Picard, is advising Benjamin and about 100 other victims. The Frenchtown, N.J., resident said SIPC is paying too slowly and “devastating’’ customers with its net-equity formula.
© Copyright 2009 Globe Newspaper Company.
