Tuesday, 31 May 2016
Last updated 3 days ago
Nov 19 2013 | 11:00am ET
Investors in Bernard Madoff feeder funds will have access to more than $2 billion in funds—after more than five years of being shut out of the main restitution process.
The so-called indirect investors remain barred from getting any of the $9.5 billion recovered by Madoff receiver Irving Picard, who has paid out claims only to direct investors with the arch-fraudster, who is serving a 150-year prison sentence for running a $65 billion Ponzi scheme. But U.S. Attorney Preet Bharara said yesterday that they'll be allowed to share the separate, $2.35 billion Madoff Victim Fund, which is led by former Securities and Exchange Commission chairman Richard Breeden.
"We expect approximately 12,000 direct and indirect investors will be eligible for a recovery, compared to approximately 1,000 remaining claimants in the bankruptcy proceedings," Breeden said. "Today's announcement brings fairness and justice for thousands of victims a giant step closer to reality."
Many feeder-fund investors have received nothing since the 2008 collapse of Madoff's fraud. "The process we have put in place opens the door for thousands of defrauded victims who otherwise might never have recovered anything," Bharara said.
Investors, both direct and indirect, lost about $17 billion when Madoff was arrested five years ago.
Breeden has set a Feb. 28 deadline for claims, and has said claims will be set by subtracting withdrawals from cash investments with Madoff.