Irving Picard Takes a Very Aggressive Approach Towards Long-Time Madoff Investors

Irving Picard, the Madoff trustee, is taking a very aggressive approach vis-a-vis Madoff investors. Since he believes that the entire fund was a fraud, he has ruled that each investor is only entitled to a return of their basis.

If you invested $200,000 with Madoff in 1985, Irving Picard says that your claim from the Madoff estate is limited that that basis that you invested.  This is true regardless of whether your statement from November 2008 shows that you had $3 million.  Your gains during the entire period of your investment, according to Picard, were phantom.  Your only due back your initial investment.

To boot, if you took money out of the Madoff firm within the last six years, you may even have to pay it back or have it offset your claim (Banco Santander already returned billions rather than fight this).

This is a tough pill for many people to swallow, and many believe that Picard is trying to keep the SIPC afloat which it would not be with a different interpretation.  He is starting to face lawsuits from investors who lost their entire paper fortunes and are thrown by the fact that they are not even going to get back $500,000.   My bet here is that Picard will prevail in the Courts.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding this website in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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