Trustee: Some Madoff
stock trades were fiction
NEW YORK – Investors wiped out by the Bernard Madoff scandal got more bad news on Friday: Investigators have confirmed suspicions that the monthly statements showing the disgraced financier was making stock trades for them were pure fiction.
“We have no evidence to indicate securities were purchased for customer accounts” in the past 13 years, said court-appointed trustee Irving Picard at a packed, town-hall style meeting at U.S. Bankruptcy Court in lower Manhattan. “This is a case where we’re going to be looking at cash in and cash out” — the shorthand definition of a Ponzi scheme…
A lawyer working for Picard also warned that the trustee would seek to recover — or “claw back” — phony profits earned by some investors so they can be redistributed to others.
“There wasn’t any stock bought or sold,” said the attorney, David Sheehan. “It was all just made up. … You got somebody else’s money.”
Picard said that about 2,400 people have filed claims — a total expected to rise sharply before the July 2 deadline….
Raymond Spungin, 77, of Staten Island told Picard he had checked with the SEC before investing with Madoff in the early 1990s.
“They said Madoff was the greatest,” he said. “We’re the victims not only of Madoff but of the incompetence of the SEC.” He and his wife believed they had $1.8 million in two accounts.
So the SEC–the “Securities and Exchange Commission”–was unaware of a Ponzi scheme that used the fake buying and exchanging of $50 billion worth of securities over 13 years?
No, wait–it’s worse than that. They thought the guy who was running the scam ‘was the greatest’? Someone is gonna sue the SEC for conspiracy.