NEW YORK, June 9, 2009
Elderly Investors Sue Madoff Trustee
Long-Time Investors Left Penniless Say Distribution Of Fraudster's Assets Handled Unfairly
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Bernard Madoff arrives at Manhattan federal court March 12, 2009, in New York. (AP Photo/Louis Lanzano)
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Photo Essay Bernard Madoff Disgraced financier charged with perpetrating massive fraud.
The lawsuit filed in bankruptcy court Friday in Manhattan said six longtime investors wiped out by the scandal together lost life savings of $9 million - the amount on fictitious statements issued by Madoff's defunct firm in 2008.
It challenges rules that could disqualify the plaintiffs from collecting up to $500,000 in government-backed compensation because over the years they withdrew more money - believing it was profit - than they originally invested.
By law, trustee Irving Picard has an obligation "to protect a customer's legitimate expectations of what the broker held in his account - even if the broker never purchased any securities in the first place," the suit argues.
Among the plaintiffs named in the suit filed last week: a 73-year-old New Jersey widow who's been forced to take a part-time job at Macy's to cover basic living expenses; a 76-year-old California man who had to sell his home and move in with his daughter; and an 88-year-old Manhattan woman who lives with her ailing husband of 69 years and has stopped paying medical bills because they need the money for food.
"We have clients who are out of money," attorney Brian Neville said Monday. "They have nothing left. They're charity cases now."
Madoff, 70, pleaded guilty in March to charges his secretive investment advisory operation was a massive Ponzi scheme. He admitted that he never invested the billions of dollars given to him by thousands of clients, and instead used the money from new investors to pay returns to existing clients.
Thousands of clients were told in phony statements from last November that their accounts had grown to nearly $65 billion. Last month, Picard said that so far he has only identified about $1 billion in assets that can be used to help cover nearly 9,000 claims. Still, victims can qualify for up to $500,000 in relief from the Securities Investor Protection Corp., which is authorized by Congress to guarantee brokerage accounts.
In calculating how to divide up the assets, client statements are "not what we are going to rely on," Picard told burned investors at a meeting earlier this year. "This is going to be a case in which we're going to be looking at cash in and cash out."
The suit argues that under Picard's approach, plaintiffs "will be victimized again." In planning their retirements, they "relied on (the statements) and reasonably believed were truthful," it says.
There was no immediate response to a message left with Picard's law firm.
Madoff, who has been jailed, faces up to 150 years in prison at his sentencing June 29.
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Posted by albert571 at 2:02 AM : Jun 9, 2009
The only differences between Bernie Madoff and the banks are that there was a run on the bank known as Bernie Madoff, he wasn't FDIC-insured, and he didn't get a government bailout.
......................Isn't it time we all moved on ?
How sad it is to just keep everyone focused on money, when we are all just trying to take care of the kids etc, just as Mr. Madoff was doing for his family.
Society needs a check up.
Obama wasn't President 65 years ago, so I'm not sure what your "hail Obama" message is about.
While listening to advisers to hear what they have to say is a good thing...each of us is responsible for our own decisions, and to turn money over to an adviser without having done due diligence, and without having the knowledge to evaluate the advisers, is...ill-advised.
I have sympathy for Madoff's investors...but not much. They chose to invest in an unregulated fund (and when the SEC tried to require such funds to register, they were blocked by the courts who sided with the funds). The funds are unregulated because they are supposed to be open only to "qualified investors"...people with high enough incomes/assets that it was "presumed" they were able to handle financial matters and make sound financial judgments. The "no name" auditor should have been their first clue that the fund might not be trustworthy. The second clue was that the returns were "too good to be true." And there were more red flags if one chose to look.
He ended up losing EVERYTHING and went bankrupt thanks to Wall Street and bad advice from crooked advisors.
This was 65 years ago!!! Things haven't changed at all since then and have only gotten worse. Since then, my parents ALWAYS warned me to NEVER trust Wall Street and put any money I made in a bank or, like Paul Powell did years ago, stuff it in a shoe box under the bed!
Today, a lot of people are finding that out the hard way with money stolen out of IRA's by GREEDY Wall Street, banks going under, gangster financial advisors, and the financial meltdown.
The moral of all this is NEVER TRUST ANYONE WITH YOUR MONEY, NO MATTER WHO OR WHAT IT IS!!!!
HAIL OBAMA????
Follow my reasoning now... it was all a fraud, so he was never entitled to a paycheck, and any and all he had accumulated with that paycheck should be forfeited also. That includes the condo, boats, houses, art and jewelry, everrything.
The same goes for his wife and family!
Madoff, 70, pleaded guilty in March to charges his secretive investment advisory operation was a massive Ponzi scheme. He admitted that he never invested the billions of dollars given to him by thousands of clients, and instead used the money from new investors to pay returns to existing clients.
Posted by albert571 at 2:02 AM : Jun 9, 2009
Ya, he should be let go - right in the middle of the Antarctic, wearing a Speedo.