Your story “Kicking back against clawback” (1.7.11 AJW) reiterates misperceptions that add confusion and unnecessary heartache in the aftermath of the Madoff fraud.
As Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS), I am guided in all actions by existing law and precedent. It is a sad but frequently overlooked fact that amounts withdrawn in excess of actual deposits in BLMIS were, in reality, funds unknowingly stolen from other BLMIS customers. This is the essence of a Ponzi scheme. There were virtually no securities purchases by BLMIS for customer accounts, so there could not be any “legitimate” BLMIS returns, as your article suggests. Under the law, I must pursue the recovery of withdrawals in excess of original deposits for fair and equitable distribution to customers with valid claims.
The efforts of my team may be the only hope for customers of BLMIS — many destitute — who withdrew little or none of their original deposits. They are not even considered in your reporting.
I fully realize that many of those who withdrew more than they deposited face severe financial hardship and are unable to return these funds. I have broad discretion in such cases, and I previously determined not to bring legal action against more than 200 Madoff customers and to dismiss certain actions against others who presented their circumstances to me. The Trustee’s continued Hardship Program will help many others, but only IF they come forward. I have made every effort to demonstrate compassion while maintaining my responsibility under the law, and I will continue to do so.
Further information about the continued Hardship Program can be found on the Trustee’s website (http://www.madoff.com/Home.aspx), including the Hardship Program application and guidelines.
Irving H. Picard
Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC
(American Jewish World, 1.21.11)
Mr. Picard,
You state that you are, ” guided in all actions by existing law and precedent.”
I question how you can say that, unless you have never heard of the NEW TIMES CASE and the SIPA 502 rule.
You are mandated by a Congressional act to carry out the intent of SIPC, and you are not doing so according to existing law and precedent.
As a SIPC appointed trustee, your first obligation is to enforce the SIPA, and then continue with the liquidation process.
SIPC has always compensated the few claims they actually approve by using the figures in the last account statements, pursuant to Rule 502. The only one time in its history that SIPC paid claims based on the net value of cash in less cash out was when those claims were for non-existent securities.
That is not the case for Madoff victims, who believed they owned stocks in companies like IBM, GE, AT&T, etc.
I challenge the validity of your comment about following case precedent and hope you can justify your wording for this article and for all American investors who rely on the facade of protection offered by SIPC.
Ronnie Sue Ambrosino
Coordinator
Madoff Victims Coalition