Madoff Costs Surpass Victim Pay-Offs as Strategy Lies in Ruins - News and Current Events | futures io social day trading
futures io futures trading

Madoff Costs Surpass Victim Pay-Offs as Strategy Lies in Ruins
Updated: Views / Replies:273 / 0
Created: by kbit Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Thread Tools Search this Thread

Madoff Costs Surpass Victim Pay-Offs as Strategy Lies in Ruins

  #1 (permalink)
Elite Member
Aurora, Il USA
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
kbit's Avatar
Posts: 5,884 since Nov 2010
Thanks: 3,303 given, 3,334 received

Madoff Costs Surpass Victim Pay-Offs as Strategy Lies in Ruins

Irving Picard, who said last year he hoped to pay investors in Bernard Madoff's defunct firm as much as $65 billion, has only put his hands on about $2.6 billion to actually give back to customers.

More than three years after Madoff's epic swindle collapsed, Picard, the trustee responsible for liquidating the firm, has paid investors back about $330 million, while holding about $2.3 billion in customer accounts. About $6.4 billion that Picard has won in settlements with former Madoff investors is being challenged in court and is unavailable for disbursement.

So far, winding down the Madoff estate has cost more than Picard has sent to customers, with total administrative spending as of March 31 at about $554 million, including fees for Picard, his firm and consultants he hired, according to his April 25 report. At the same time, Picard's strategy of filing $100 billion of lawsuits to claw back money from Madoff winners has largely collapsed, as federal judges led by U.S. District Judge Jed Rakoff in New York have dismissed about $90 billion of Picard's claims.

"There is a huge risk about making predictions, because you can never be sure what a court will do," said Chip Bowles, a bankruptcy lawyer with Bingham Greenebaum Doll LLP in Louisville, Kentucky. "People can object to his fees if he spent millions on litigation and promised a lot of stuff and it didn't work out."
Claim Prices Slump

As a result of Picard's setbacks in court, bids for claims on the Madoff estate, which peaked at about 70 cents on the dollar in January 2011, now sell in "the low 50s," said Joseph Sarachek, CRT Capital Group LLC's managing director of claims trading.

The price also reflects the likelihood that the payoff for investors who lost money in Madoff's fraud may be far off, Sarachek said. That in turn makes it harder for claimholders to sell their IOUs at attractive prices.

"It does look like the case is going on for several years," he said.

Amanda Remus, a Picard spokeswoman, didn't immediately respond to an e-mail asking if the trustee has revised his estimate of how much he will ultimately pay Madoff customers.

Picard's latest estimate of the con man's fictitious customer statements is $52 billion. That includes $17.3 billion in actual money invested, with the rest being the fake profits Madoff invented for customer statements. As of December, Picard estimated the total at $65 billion, before the withdrawal of some claims.
SIPC Payments

The $330 million he has sent to customers, out of the $2.6 billion set aside for them, contrasts with about $800 million they've received from the insurance program of the Securities Investor Protection Corp., which hired Picard and pays him.

SIPC, which is funded by the major brokerage firms, no longer expects Picard to pay all currently allowed claims of $17.3 billion in full, "based on current trustee assets, lawsuits filed, and the estimated possibilities for recoveries arising from that litigation," the U.S. Government Accountability Office said in a March report.

Even if Picard gets all of the $9 billion he says he has raised, he would need another $8 billion or so to pay the claims, the GAO said.

"SIPC does not now expect this level of recoveries to occur," the report said.
Picard Fees

As of March 31, Picard himself has been paid about $5.1 million in fees. His law firm, Baker & Hostetler LLP, has been paid about $262.2 million in fees. All professional fees and expenses now stand at about $522 million, with about $31.7 million having been spent on general administrative costs such as office rent and telephones. By 2014, the bill will top $1 billion, Picard has estimated.

Most of the money Picard says he has raised came from settlements, not court victories for his lawsuits, and he is fighting to preserve his exclusive right to sue parties that allegedly profited knowingly from the fraud.

Some customers say he is usurping their rights. After a district judge in March upheld Picard's $5 billion agreement with Jeffry Picower's estate -- his biggest settlement by far -- lawyer Helen Chaitman appealed on behalf of a client. Chaitman will "absolutely" take the case as far as the U.S. Supreme Court if necessary, she said in an e-mail -- a process that could take more than a year.
Picower Withdrawals

Picard's 2009 suit claimed that Picower, one of the con man's largest individual investors, should have known Madoff ran a Ponzi scheme when he withdrew $7.2 billion from the brokerage. Sarachek said Madoff claim prices were around their peak in January 2011, when a judge approved the Picower forfeiture, with $5 billion going to the Madoff estate and $2.2 billion to the U.S.

Some customers regard the Picower settlement as unfair because it stops them from suing the Picower estate themselves.

Picard says he can't distribute the Picower money until there's a final court order that can't be appealed. He didn't have to lock himself into waiting for finality, as Picower's estate didn't make that a condition of forfeiting money, Chaitman said in a court filing.

The delay in paying customers "is totally of the trustee's own making," she said. Chaitman has also challenged most of his fee requests.

"Unfortunately, Madoff's victims have not received the benefits of Mr. Picard's services," Chaitman said in an e-mail.
Overlapping Claims

Picard opposes her right to sue the Picower estate, saying her claims overlap with his, which take priority as he is trustee. Moreover, if Chaitman wins the right to sue the Picower estate for her customers, and wins her suit, she may be choosing who gets the money. Only the trustee can claw back and allocate money allegedly stolen from Madoff customers, Picard has said.

Picard's claim to an exclusive right to sue for Madoff recoveries has embroiled him in a battle with California Attorney General Kamala Harris over investment adviser Stanley Chais's estate. Harris is trying to pursue a $270 million action against the estate, alleging Chais passed himself off as an "investment wizard" and collected fees for "doing nothing more than funneling all of his investors' capital into an epic Ponzi scheme."

Picard sued Harris Jan. 4 in U.S. Bankruptcy Court in Manhattan, saying her suit interferes with the collection of assets needed to help compensate Madoff victims. A Manhattan court hearing is set for May 17.
Tremont Group

Madoff customers also have challenged Picard's $1 billion deal with Tremont Group Holdings Inc. and a $220 million settlement struck with the heirs of Norman F. Levy. Chaitman alleges that Levy, who died in 2005 at age 93, financed Madoff's Ponzi scheme to the tune of about $100 billion.

Picard also won't pay out any more from the customer fund without a "final unappealable decision" on whether he owes them not only the money they invested, but also the fictitious profit on their brokerage statements, according to his website. The owners of the New York Mets baseball team, whom Picard had sued for $1 billion, were among those challenging Picard's calculation of how they should be paid, until they reached a $162 million settlement that doesn't require them to pay any money for at four years, if ever.

The U.S. Supreme Court delayed a scheduled conference on whether it will consider an appeal by Madoff customers who say they should be compensated for loss of profits reported on their brokerage statements until after May 25, when it wants the U.S. Securities and Exchange Commission to weigh in on the subject. Allowable claims would treble to $52 billion if the judges agreed with the customers -- Picard's current estimate of total fictitious profits in the Ponzi scheme.

Madoff Costs Surpass Victim Pay-Offs as Strategy Lies in Ruins - Yahoo! Finance

Reply With Quote


futures io > > > > Madoff Costs Surpass Victim Pay-Offs as Strategy Lies in Ruins

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

Wyckoff Hunting for Great Risk/Reward Ratio w/Gary Fullett

Elite only

Digging into the Details of iSystems w/Stage 5 & iSystems

Jun 5

Similar Threads
Thread Thread Starter Forum Replies Last Post
LIES LIES LIES LIES LIES LIES LIES Gabriyele News and Current Events 3 January 16th, 2012 03:44 PM
The Lies that Europe's Politicians Tell Themselves kbit News and Current Events 0 January 2nd, 2012 12:43 PM
Beneath Jobs Report Surface Lies Some Ugly Truths Quick Summary News and Current Events 0 August 5th, 2011 10:30 AM
Venezuela Says Oil Reserves Surpass Saudi Arabia's Quick Summary News and Current Events 5 July 18th, 2011 02:35 PM
Robber forces victim to drink liquid soap...and other strange aspects of a robbery RM99 Off-Topic 0 April 6th, 2011 02:29 AM

All times are GMT -4. The time now is 03:55 PM.

Copyright © 2018 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432,
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2018-05-26 in 0.09 seconds with 19 queries on phoenix via your IP