NIAP Sets the Record Straight

Outraged, NIAP sends letter to The Palm Beach Post Editor in response to the editorial published on January 11th….

To the Editor:

The fallout of the Bernard Madoff fraud is not nearly as straightforward as the 1/11 editorial suggests.

SIPC is grossly underfunded, and was warned on more than one occasion that its coffers were so low that it would not be able to handle a catastrophic default. That has had a huge impact on the bankruptcy proceedings. For the privilege of putting the SIPC stamp on their brokerage statements, member broker-dealers were charged a mere $150 annually (and no fees at all were collected from 2001-2008). The editorial says that raising those fees would shift the burden to shareholders, but an increase is obviously overdue and current fees are so miniscule that it’s highly unlikely an increase would be felt by any marketplace participant. For the benefit of marketing SIPC membership and the significant back office cost savings it has provided to the securities industry, brokerages should pay more than $150 per year.

Additionally, the Second Circuit court of Appeals, the second highest federal court in the country outside of the Supreme Court, ruled in favor of Ms. Chaitman’s definition of “net equity,” which is clearly defined in the Securities Investor Protect Act. In fact, contrary to the editorial, the Courts have never ruled in a manner consistent with the SIPC approach. The matter will be heard in Bankruptcy Court in New York City on February 2. Several prominent law firms, in addition to Ms. Chaitman’s, have filed legal briefs in support of her position.

Madoff victims are not asking for a bailout, they are simply asking for existing laws to be enforced.

Ron Stein
President, Network for Investor Action and Protection

SourcedFrom Sourced from: Madoff Help News & Assistance

Share This Page:
  • email
  • Facebook
  • Twitter
  • LinkedIn