Text Size

Email Post

Print Post

Comments (16)

Save Article

New York - The trustee in charge of untangling the mess brought on by the Bernard Madoff scandal told investors Friday there was no indication the disgraced money manager bought securities for his clients.

“We have no evidence to indicate securities were purchased for customer accounts,” said Irving Picard, the court-appointed trustee overseeing the liquidation of Madoff’s assets.

He told a meeting for investors that he has recovered $650 million so far and noted that victims could qualify for up to $500,000 in funds from the Securities Investor Protection Corp., also known as the SIPC.

Picard detailed the history of the case for the group and how claims will be processed. He said his office has received 2,350 claims so far and expects the number to double. He also said the deadline for submitting claims is July 2.

At the hearing, David Sheehan, a lawyer working for Picard, called the alleged fraud “a Ponzi scheme where no stock was purchased.”

Sheehan also said the SIPC will be trying to recover “false profits” earned by some investors.

“There wasn’t any stock bought or sold,” he said. “It was all just made up. ... You got somebody else’s money.”

Congress created the SIPC in 1970 to protect investors when a brokerage firm fails and cash and securities are missing from accounts.

Picard said his office and criminal investigators are reviewing a mountain of evidence, including 7,000 boxes of records at a Queens warehouse that go back more than a decade.

Sheehan added that investigators are reviewing “thousands and thousands of e-mails” from Madoff’s operation.

Picard also said his office plans to issue dozens of subpoenas in the coming weeks related to Madoff’s business dealings.

He cautioned that the criminal investigation is ongoing and said: “We are operating out of a crime scene. There is a limit to what we can say.”

Picard called the meeting at a museum in lower Manhattan for investors who lost money because of the alleged fraud. An auditorium that holds 460 was mostly full although it wasn’t clear which of those attending had actually invested with Madoff.

More of today's headlines

“New York, NY - Winning a third term may not be an easy feat for New York City Mayor Michael Bloomberg, a new poll out today suggests. The two-term mayor is facing his...” New York, NY - Bloomberg Could Face Tough Reelect “Kiamesha Lake, NY - Developers won't begin turning an old Borsht Belt landmark into a $1 billion casino and horse racing complex this spring because they haven't found...” Kiamesha Lake, NY - Construction on Catskill Casino on Hold