Sunday, 31 July 2016
Last updated 1 day ago
Jun 26 2012 | 11:56am ET
The Supreme Court has upheld the Bernard Madoff receiver's formula for determining which victims will get what, dealing a final blow to the so-called "net winners."
The high court, without comment, rejected those Madoff clients' appeal of the Second Circuit Court of Appeals' decision, which approved Irving Picard's plan to act only on the principal invested with Madoff, rather than the figures in investors' final account statements, acknowledged by all to be works of fiction. The move leaves the lower-court decision in place and could clear the way for victims to be paid more quickly; a distribution, the second, is to go forward, Picard said yesterday.
Picard's plan had the approbation of the Securities Investor Protection Corp. and Securities and Exchange Commission.
"After more than two years, this is excellent news for the hundreds of victims who have not received a return of all the funds they deposited with Madoff," SIPC CEO Stephen Harbeck said. "These victims can now look forward to receiving a distribution in the near future."
Had the Supreme Court agreed to hear the case and sided with the net winners, the number of victims eligible to get money from the receiver could have soared. Picard has decided that Madoff clients who withdrew more than they invested with the fraudster are not eligible to get money back; indeed, the receiver has sued to claw back the money they withdrew above their principal investments.
All told, Picard has recovered about $11 billion of the $17.3 billion invested in the $65 billion Ponzi scheme.