Bernie Madoff: Did He Steal Your Money Too? | Newsweek Business

Did Bernie Madoff Steal Your Money?

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So what happens now? Attorneys like Gluck believe some of that money is recoverable, despite Madoff's claims that he is tapped out. "Where did that money go?" says Gluck. "He didn't buy a small country. It doesn't sound like all that money went to old investors. And $50 billion doesn't just disappear." Irving Picard, the court-appointed trustee is trying to follow Madoff's tracks and decipher his records, as well as a host of individual attorneys, SIPC and the Securities and Exchange Commission.

Worried investors can start to do their own investigating. If you know you had money with Madoff or strongly suspect that you did, you can call a special FBI hotline, 212-384-2359; check the latest from Picard (now at www.madoff.com); and trade stories and hints with other victims at a new information blog for families affected by Bernie Madoff. One tip: you may be able to go back and file amended tax returns for previous years when you were claiming investment returns that may not have been real. Some investors may get money back from SIPC, but that's unlikely to provide much help to wiped-out millionaires—its insurance program maxes out at $500,000 per account.

Those third-party victims, the people collaterally damaged by decimated foundations, have fewer avenues of comfort. Some other charitable groups are trying to pick up the slack and donate more to cover Madoff-related losses, but not every program or employee will receive the funding they expected.

And even if you think you're immune from the scandal, it's a good idea to take a close look at all your holdings anyway. Find out exactly where your money is invested, make sure that company is using a third-party brokerage to hold funds and securities (Madoff was using his own) and confirm that your wealth manager is audited regularly by an independent and reputable auditor. Workers and retirees in big pension funds should take the time to find out whether their fund invests in funds of funds, hedge funds or private wealth managers and inquire into the due-diligence practices of the pension managers.

Savers shouldn't keep all of their money in any one investment or invest in any strategy they can't get their brain around, says Bradley Alford of Alpha Capital Management, an Atlanta firm that researches hedge funds for potential investors. He adds, with some irony, that another red flag is any investment manager who hasn't admitted to losing some money this year. In a time of wobbly stock and bond markets, Madoff's claims of year-in and year-out earnings of 10 percent may turn out to have been the most blatant red flag of all.

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The first paragraph of the SEC???s Introduction states, ???The mission of the U.S. Securities and Exchange Commission is to protect investors ???..

Will someone, please, tell me what they have done to protect the people that invested with the likes of Bayou Group LLC and Bernard L. Madoff???s stuff?

The SEC regulators have access to, are supposed to avail themselves of and act on information that investors would be considered insiders and prosecuted for having such access and information and acting on it. These are very regulators that are supposed to be our insiders and protect our interests but do not seem to expose or regulate the crooks. The SEC has been absolutely negligent and likely implicated in the Madoff fraud. Apparently they have not bothered to monitor Madoff???s activities and have even resisted investigating the many complaints received. Now they want to further perpetuate the fraud by ducking out and have the Bankruptcy Court take over to clean up this mess.

The Bankruptcy Court, looking for money to firstly fund the exorbitant lawyer???s fees, then huge accountant???s fees and then possibly court costs that will occur, will now punish the easily targeted honest investors that have acted in good faith and have been forced to comply with edicts imposed by the SEC regulators.

In their zeal to bring monies into the Bankruptcy Court, I would hope the Court will look to the negligent SEC regulators as individuals and to the agency as a whole as being financially liable. I don???t really think the Court has the guts to do it but if they did it would be much more appropriate than trying to rob investors that had the good sense realize there might be something wrong and get out before the collapse.

The biggest Ponzi scheme in the history of the world is what ???Social Security??? has become. When it finally goes broke, will the trustee in bankruptcy try to recover our Social Security benefits?

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Posted By: TheGardener @ 01/05/2009 3:08:18 PM

What on earth is all this fuzz about? Our entire value system is based on deceit and lies and you are going to use Madoff as a scapegoat while the dude around the corner and in the UN, has his church, mosque, synagogue, temple - and hell knows what other little boys and girls club they invent to sell an afterlife insurance they cannot pay out; on top of it all, these dudes are all tax exempt!.

You people need to check the foundations on which you build a society. Madoff is the least of the wickedness out there. He didn't kill anyone. Good Grief people get your values straight.
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Posted By: John-Brown-Fla @ 01/05/2009 12:28:32 PM

The first paragraph of the SEC???s Introduction states, ???The mission of the U.S. Securities and Exchange Commission is to protect investors ???..

Will someone, please, tell me what they have done to protect the people that invested with the likes of Bayou Group LLC and Bernard L. Madoff???s stuff?

The SEC regulators have access to, are supposed to avail themselves of and act on information that investors would be considered insiders and prosecuted for having such access and information and acting on it. These are very regulators that are supposed to be our insiders and protect our interests but do not seem to expose or regulate the crooks. The SEC has been absolutely negligent and likely implicated in the Madoff fraud. Apparently they have not bothered to monitor Madoff???s activities and have even resisted investigating the many complaints received. Now they want to further perpetuate the fraud by ducking out and have the Bankruptcy Court take over to clean up this mess.

The Bankruptcy Court, looking for money to firstly fund the exorbitant lawyer???s fees, then huge accountant???s fees and then possibly court costs that will occur, will now punish the easily targeted honest investors that have acted in good faith and have been forced to comply with edicts imposed by the SEC regulators.

In their zeal to bring monies into the Bankruptcy Court, I would hope the Court will look to the negligent SEC regulators as individuals and to the agency as a whole as being financially liable. I don???t really think the Court has the guts to do it but if they did it would be much more appropriate than trying to rob investors that had the good sense realize there might be something wrong and get out before the collapse.

The biggest Ponzi scheme in the history of the world is what ???Social Security??? has become. When it finally goes broke, will the trustee in bankruptcy try to recover our Social Security benefits?
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Posted By: drelkin @ 12/31/2008 1:53:25 PM

People ask what happened to the money. Isn't it obvious? It was paid out as dividends to investors--that is the nature of a Ponzi scheme. In fact, I would bet that many investors took out most of their earnings, which I have heard were between 10-12% annually. Thus, these investors got their money back so long as they were in the fund for between 10 and 8-1/3 years.