Liquidation of Madoff firm a pricey US$28m
Published: Wednesday | December 31, 2008
A home belonging to disgraced investment guru Bernard Madoff and his wife Ruth Bernard Madoff is shown in Palm Beach, Florida Tuesday December 30, 2008. Palm Beach police are investigating the disappearance of a US$10,000 copper sculpture of two-seated lifeguards from the multimillion-dollar home. - ap
United States Bankruptcy Judge Burton Lifland on Tuesday approved the transfer of US$28.1 million to cover expenses tied to the liquidation of Bernard Madoff's investment firm.
Madoff is accused of running an elaborate pyramid scam that duped investors ranging from individuals to charities to large banks out of potentially $50 billion.
Irving Picard, the trustee presiding over the liquidation of Madoff's investment firm, said he needed the US$28.1 million to cover employee salaries and other costs, according to court documents.
Bank of New York Mellon Corp previously agreed to transfer the funds, but the bankruptcy judge first had to approve the transfer.
BNY Mellon already transferred about US$883,000 to cover costs tied to the liquidation.
Picard will oversee the liquidation as the Securities Investor Protection Corp (SIPC) attempts to help investors recoup their money.
SIPC was created by Congress in 1970 to protect investors when a brokerage firm fails and cash and securities are missing from accounts. Funds can be used to satisfy the remaining claims of each customer up to a maximum of US$500,000.
The figure includes a maximum of up to US$100,000 on claims for cash.
On Monday, a judge presiding over civil claims against Madoff said he may be willing to consider extending relief to those who invested in Madoff's business through third parties.
Judge needs briefing
To consider allowing investors who invested through third parties to file claims with SIPC, US District Judge Louis L. Stanton said he needs a formal application and briefing from SIPC, the Securities and Exchange Commission, a trustee for Madoff's business and representatives of investors.
Madoff, 70, a former Nasdaq stock market chairman, has become one of the most vilified people in America since news broke December 11 that he allegedly had been running a giant pyramid scheme, paying returns to certain investors out of the principal received from others.
So far, investors have said that they have lost more than US$30 billion, according to an Associated Press calculation.
Reports indicate Madoff was running the alleged scam for decades.
- AP
