The Naples Daily News reports today in a front page story that the tentacles of the $50-billion Bernard Madoff Ponzi scheme have reached Southwest Florida. To view the Naples Daily News story and my comments about the situation, click here.
Also, the U.S. District Court Judge for the Southern District of New York overseeing the Madoff case ordered that Madoff’s brokerage firm be liquidated under the supervision of a bankruptcy court.
The Securities Investor Protection Corporation, which oversees a fund created by Congress to help investors of failed brokerage firms, asked the court for the liquidation so investors can be afforded protections available under the federal Securities Investor Protection Act.
While SIPC may be able to provide some relief for investors, customer claims are capped at $500,000 for an individual customer. According to SIPC’s web site, that amount includes a maximum of $100,000 on claims of cash.
These capped amounts may mean that larger investors may want to consider other additional recovery options. At Vernon Healy, we are helping Madoff investors explore their recovery options in the wake of this massive fraud.
In a statement released Monday, SIPC President and CEO Stephen Harbeck said that based on information provided by the Securities and Exchange Commission and the Financial Industry Regulatory Authority, Madoff’s customers need protections under federal law.
However, Harbeck said the massive scope of the fraud and the state of the firm’s records will make providing relief to customers more difficult.
“It is unlikely that SIPC and the Trustee will be able to transfer the customer accounts of the firm to a solvent brokerage firm,” Harbeck said in a statement. “The state of the firm’s records may preclude a transfer of customer accounts. Also, because the size of the misappropriation has not yet been established, it is impossible to determine each customer’s pro rata share of ‘customer property.’”
“Judge signs order to protect Madoff investors and moves case to bankruptcy court” – Associated Press
For more information, contact Chris Vernon at (239) 649-5390 or e-mail cvernon@vernonhealy.com
