The trustee of SIPC, the securities-industry nonprofit group with a role in the firm's liquidation, will assemble a mailing list of customers of Mr. Madoff's firm, mail them claim forms, and review their claims against records of the firm and determine how to satisfy them using a combination of SIPC funds and firm assets.
SIPC is set up to provide as much as $500,000 per customer for claims of theft from a brokerage firm. With about $1.6 billion currently on hand, SIPC could satisfy claims of more than 3,000 customers, said its CEO, Stephen Harbeck.
It's not clear how many customers Mr. Madoff's firm had. The process could take months, Mr. Harbeck said. "We'll proceed as quickly as we can."
Thank goodness the fraud was detected during option expiration. Otherwise the "stocks" would of been sold, and assets then would of been invested in "cash" and then the claim would be $100,000. So obviously that scenario wouldn't play in Peoria, so investors will get back $500,000, especially when the money wasn't there in the first place. So everyone gets $500K in cash, and you can call it a day. Which means those with the smaller accounts with Madoff did quite well, especially if they were receiving distributions!
Now the lawsuits will be with the banks that put the investors in these securities. Look for some blanket settlements, and look for them quickly. Consider that a typical investor would of lost 50% of his money in the market anyway, and you have an idea of what the starting figure is. And when you thought you may have had nothing, then 50% doesn't seem so bad.
And the feeder fund firms that have been effectively wiped out? Who knows what will happen there.
Today there were rumours that Arthur Levitt, the ex SEC commissioner was an investor with Madoff. If it is true, it looks like it helps if your con snows the regulators!
At least some investors with Madoff will breathe easier tonight!
'would of' -> 'would have'
thanks...that does sound better!
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