Madoff Victims: Are You Kidding Me?!

First off, I stand partially corrected in this post, and I have updated based on feedback I received from Ronnie Sue Ambrosino at BernardMadoffVictims.org Coalition.  We at WallStNation would like to be fair to our readers.  Ronnie's response is provided at the end of the article. 

It is in this post that you will catch a rare glimpse into my personal mind.  A look at the naked emotion that exists for me in the financial world that surrounds us all.

Bernie Madoff is in jail, but the chaos is left behind. His victims are outraged, demanding their money back.  Fair enough.  The question that remains is how much should they get back? Should they receive just the money they originally invested, or the money plus the profits Madoff told them they made in their account?

This is the latest craze that must be dealt with in the aftermath of the largest Ponzi scheme created by Madoff.  The attorney tasked with trying to distribute money recovered from Madoff’s scheme, Irving Picard, has so far been operating on a simple “get your money back” approach. That is, whatever money people originally invested with Madoff is what they get back.

But for some victims, that's not enough. They want the money that was shown on the account balances they received from Madoff.  Nine small investors have hired a lawyer to retrieve the $6 million account balance that Madoff provided them on a statement, whereas their initial investment was $3.8 million.  Call me crazy, but if I got duped in the world’s largest Ponzi scheme, I’d be pretty darn happy to get my initial investment back.  And so the US greed rolls on, my disappointment peaks as the people involved in this are too lazy to take the reigns of their financial destiny and cry foul + damages when they blindly hand their money over to a stranger to invest for them.  Trust me you people; be happy to get your initial investment back, particularly after the second worst market meltdown in the history of the US.
 
Picard is taking this to a judge. He's collecting all the contested claims by victims and has asked for a February court hearing to settle the issue at hand.

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Ronnie Sue Ambrosino sent a message…

I am a Madoff victim and have taken considerable effort over the last 9 months to educate myself on the facts of our situation. As such, I have read more legal objections, statutes, case histories and essays than I care to. However, the reading and research have given me the information I need to explain to those who haven't done the same what the reality of the situation is (as it relates to the trustee and his actions).

As trustee, Mr. Picard actually wears two hats. One, as you aptly describe,  is to try "to distribute money recovered from Madoff’s scheme". This money is to be distributed pro rata  from funds collected in the liquidation (bankruptcy) action.  But, that is the second stage of his duty. The first one is to ensure that investors are paid PROMPTLY with funds from the Securities Investor Protection Corp ("SIPC"). SIPC, created in 1970 by an act of Congress states that victims of a fraudulent broker are entitled to payment (up to $500,000) based on the amount of money they legitimately expected they had at the time the fraud was discovered and the broker's firm was liquidated.

For Madoff investors, this is the value of their last account statement. No where in the Congressional act does it discuss money invested minus money withdrawn as the basis for claims. In fact, the act clearly states that the definitions within  can only be changed by an act of Congress.  Therefore, Mr. Picard's actions are unfounded and negate the actions of the United States Congress. In fact, Mr. Harbeck, President of SIPC agrees with the issues the victims are saying. So does Josephine Wang, chief counsel for SIPC.  As victims, we have done our homework and know the facts. I wonder why Mr. Picard hasn't done the same.

Thank you for allowing me to explain these facts to your readers,
Ronnie Sue Ambrosino
Coordinator,
BernardMadoffVictims.org Coalition