Irving Picard (left) with attorney David Sheehan
The attorney for the bankruptcy trustee in the Madoff case argued before a packed courtroom Tuesday that “no one in their right mind” would use the financial statements concocted by Madoff as a basis for distributing the funds.
The New York Law Journal reports that during a nearly four-hour hearing, David J. Sheehan, an attorney for the trustee, Irving H. Picard, urged the court to accept Picard’s “cash-in/ cash-out” method of compensating investors.
Under that approach, investors who withdrew less cash from their Madoff accounts than they deposited (“net losers”) would share in whatever Picard recovers, now about $1.5 billion. On the other hand, investors who withdrew funds over and above what they invested (“net winners”) would get nothing.
Investors who object to Picard’s plan insist that any payout should be based on what Madoff claimed they made as recorded in their Nov. 30, 2008, account statements–just two weeks before Madoff was arrested.
Sheehan told the court that while investors can possibly receive up to $500,000 from SIPC, that is only after someone has “already determined that you have an allowed claim. There’s no insurance. There’s no $500,000 that everyone gets a check for. I don’t understand why people don’t get that,” he told the court. An attorney for Madoff investors, however, said the trustee’s method was contrary to 80 years of precedent in securities law and a throwback to the concept of “buyer beware.”
Picard receiving 37 million is absolutely disgraceful. This is what is wrong with this country.
This is almost as bad as Madoff
I can’t help but comment that Mr. Sheehan’s words, “no one in their right mind” would use the financial statements concocted by Madoff as a basis for distributing the funds seems to be a direct insult to the IRS, who has been the biggest beneficiary of the Madoff fraud.
The IRS has used the financial statements ‘concocted’ by Madoff as the tax basis to collect revenue from tens of thousands of investors for more than 30 years.
I wonder how the government can justify the taxes paid against ‘concocted’ statements but can’t justify the payment of SIPC funds to the investors against those same statements.
I fear for all other American investors who may also be caught up in this inconsistency in the future.
Ronnie Sue Ambrosino
Coordinator
Madoff Coalition for Investor Protection
I am a ponzi scheme victim of Allen Stanford.In our case the receiver has used the cash assets retrieved toward payment of his legal fees,also $37million to date.With Stanford’s trial set for Jan.2011,the $75million in cash will be depleted.For SEC,declared negligent in Madoff by IG Kotz,ignored Stanford since 2007,hiring its own Receiver is the height of conflict of interest.Mary Schapiro was chairperson at Finra and now at SEC.Used Madoff as her consultant,hired Madoff’s son,Mark,to work at SEC,and last week was given a $3.6million bonus for being CEO in 2008.Stanford defrauded 28,000 victims of $7.2Billion.Being paid hourly,what is the incentive to retreive/distribute assets quickly.who has benefited from Picard’s “Hardship case”program?Good luck.Any recommendations is appreciated,lost my lifes savings