GARRETT ASKS SIPC: WHERE’S THE MONEY GOING?
Chairman of the Subcommittee on Capital Markets, Congressman Scott Garrett (R-NJ), has requested a detailed breakdown of the intended distribution of the vast amount of expected recoveries of customer property by the Trustee. The request references an earlier letter by NIAP to SIPC as well as a September 2010 response by SIPC to Garrett which indicated that the largest 138 accounts under the Trustee’s method had claims for over $14 Billion in recoveries – over 80% of the claim totals allowed.
NIAP has long asserted that these funds would most likely amount largely to a payoff of a few very large individual investors, but predominantly large domestic and international firms at the expense of the clawing back of over 1000 innocent investors. Neither the Trustee nor SIPC have been forthcoming about this group of potential recovery recipients.
This request follows Congressman Garrett’s introduction of HR 757, “The Equitable Treatment of Investors Act”, which seeks to provide relief for direct Madoff investors by insisting upon SIPC’s prompt payment of claims, adherence to final account statements, the prohibition of the clawback of innocent victims while preserving the responsibilities of the trustee to pursue those considered culpable in the fraud.
We look forward to SIPC’s responses to these questions. In the meantime, Congressman Garrett and his staff should again be congratulated on their advocacy on behalf of BLMIS victims who have been so poorly treated by the regulatory regime.
Ron Stein
