Today's New York Times reports that some $12 billion was pulled out of bank accounts at suspected ponzi-schemer Bernie Madoff's firm, just before his arrest last year. As The Times reports, "Those figures offer a bit of hope for Mr. Madoff’s thousands of defrauded customers. Under federal law, the trustee overseeing the Madoff bankruptcy can sue to retrieve that money from the investors who withdrew it."
The reporter, Diane Henriques, is one of many close followers of the case in the Frontline documentary The Madoff Affair, which aired this week on CPTV, and which we featured on Tuesday's Where We Live. Listener Richard wishes we would stop dwelling on the past in the Madoff case, and get on to new business:
"I had been with Madoff from mid 1980's but my dad was with him since 1970. Everyone talks about Madoff and the flags and whether it is Ponzi the whole way or from about 1992. We've all been hurt, especially the direct investors. The big shots - feeder funds should have done the due diligenjce.
The problem is past. The government is bailing out the world YET the person now who can help, the trustee, Mr Irving Picard, is refusing to act and help."
His complaint against Picard is echoed by others in this story from the New York Post: "An angry group of more than 350 Madoff victims claim they are bring shortchanged by Picard -- whose job is to collect as much of the $23 billion lost during the decades-long Madoff fraud, using rules laid out by the Securities Investor Protection Corp. Under those rules, SIPC is required by law to pay victims up to $500,000 in securities or $100,000 in cash."
Instead, the article goes on, he's being accused of paying out much smaller amounts. The Securities and Exchange Commission has stepped in to get the process moving. Cold comfort, perhaps for many investors, already seething at the SEC's lack of oversight of Madoff.