Madoff investors hoping for a bailout
THE ASSOCIATED PRESS
December 19, 2008
Securities Investor Protection Corp. officials say the books of Bernard L. Madoff Investment Securities Llc are in complete disarray and could take six months or more to piece together.
But that may be too late for Ronnie Ambrosino, who was a millionaire until a week ago. She is among the long list of investors whose fortunes were said to be wiped out by Bernard Madoff's alleged $50-billion Ponzi scheme.
Like them, with bills piling up and her bank account vanishing, she's left hoping for a bailout that might never come.
She plans to sue Madoff, but that could take years to work through the courts and yield little in the end. Her best hope to recoup some of her money is from the SIPC, an industry-funded organization set up by the government to protect investors from fraud.
But, here's the problem: SIPC does not have enough money to pay out all the claims that are sure to come from one of the biggest fraud cases ever to hit Wall Street. Securities attorneys say the organization has a reputation of being tough to squeeze money from, and each investor is only entitled to a maximum payout of $500,000 if a claim is approved.
"It feels like I'm drowning and someone is saying, 'We're going to save you, but we have to build the boat first,'" said Ambrosino, 55, who had $1.6-million invested with Madoff. "We can't wait for SIPC to go through all the papers."
The scope of what SIPC covers, however, can be limited. SIPC, for example, typically won't cover claims for cases involving stock manipulation or investments made into hedge funds.
Since its inception in 1970, SIPC has paid out $508 million to reimburse some 625,000 investors who lost money. The Madoff case will be SIPC's biggest test, and experts are raising questions about whether the organization can handle the massive amount of claims that are expected. Some experts suggest the government might have to assist.
"There's no doubt that hearings will be held on this, and some government aid is a very logical request," said Robert Schachter, an attorney with New York-based Zwerling, Schachter & Zwerling, which is representing several Madoff victims. "If we're bailing out Wall Street and the auto industry, maybe these individuals should be bailed out too."
Madoff, who was arrested last week and charged with securities fraud, was removed from a United Kingdom list of "approved" financial services providers, along with his brother and two sons. The status of Madoff, 70, was changed to "inactive" on the Financial Services Authority's register two days ago, Bloomberg News reported.
Meanwhile, Ambrosino, who retired early, has the furniture inside her motor home as her only assets now.
http://www.newsday.com/business/ny-bzmado195970544dec19,0,6848924.story
THE ASSOCIATED PRESS
December 19, 2008
Securities Investor Protection Corp. officials say the books of Bernard L. Madoff Investment Securities Llc are in complete disarray and could take six months or more to piece together.
But that may be too late for Ronnie Ambrosino, who was a millionaire until a week ago. She is among the long list of investors whose fortunes were said to be wiped out by Bernard Madoff's alleged $50-billion Ponzi scheme.
Like them, with bills piling up and her bank account vanishing, she's left hoping for a bailout that might never come.
She plans to sue Madoff, but that could take years to work through the courts and yield little in the end. Her best hope to recoup some of her money is from the SIPC, an industry-funded organization set up by the government to protect investors from fraud.
But, here's the problem: SIPC does not have enough money to pay out all the claims that are sure to come from one of the biggest fraud cases ever to hit Wall Street. Securities attorneys say the organization has a reputation of being tough to squeeze money from, and each investor is only entitled to a maximum payout of $500,000 if a claim is approved.
"It feels like I'm drowning and someone is saying, 'We're going to save you, but we have to build the boat first,'" said Ambrosino, 55, who had $1.6-million invested with Madoff. "We can't wait for SIPC to go through all the papers."
The scope of what SIPC covers, however, can be limited. SIPC, for example, typically won't cover claims for cases involving stock manipulation or investments made into hedge funds.
Since its inception in 1970, SIPC has paid out $508 million to reimburse some 625,000 investors who lost money. The Madoff case will be SIPC's biggest test, and experts are raising questions about whether the organization can handle the massive amount of claims that are expected. Some experts suggest the government might have to assist.
"There's no doubt that hearings will be held on this, and some government aid is a very logical request," said Robert Schachter, an attorney with New York-based Zwerling, Schachter & Zwerling, which is representing several Madoff victims. "If we're bailing out Wall Street and the auto industry, maybe these individuals should be bailed out too."
Madoff, who was arrested last week and charged with securities fraud, was removed from a United Kingdom list of "approved" financial services providers, along with his brother and two sons. The status of Madoff, 70, was changed to "inactive" on the Financial Services Authority's register two days ago, Bloomberg News reported.
Meanwhile, Ambrosino, who retired early, has the furniture inside her motor home as her only assets now.
http://www.newsday.com/business/ny-bzmado195970544dec19,0,6848924.story