STATEMENTS & PRESS RELEASES
Sort By:
March 23, 2015
Press Release: Recovery Agreement Reached with Defender Feeder Fund

Press release from the office of Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC

RECOVERY AGREEMENT REACHED WITH DEFENDER FEEDER FUND
BLMIS CUSTOMER FUND TO BENEFIT BY $93 MILLION

TOTAL RECOVERIES NOW MORE THAN $10.64 BILLION

NEW YORK, NEW YORK – March 23, 2015– March 23, 2015 – Irving H. Picard, Securities Investor Protection Act (SIPA) Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS), filed a motion today in the United States Bankruptcy Court for the Southern District of New York seeking approval of a recovery agreement with Defender Limited and related entities. Defender was a Madoff feeder fund that deposited its assets with BLMIS.

Under the terms of the agreement, the BLMIS Customer Fund will benefit by $93 million, representing 100 percent of the fraudulent transfers and preference payments which the SIPA Trustee sought to recover from Defender. In addition, the SIPA Trustee will allow the Defender BLMIS customer claim in the amount of $522.8 million.

Once the claim is allowed, Defender is entitled to catch-up payments from the five interim distributions the SIPA Trustee has made to BLMIS victims to date. Out of these catch-up payments, the first $93 million will be used to pay the amount Defender owes to the BLMIS Customer Fund. As an allowed claimant, Defender will receive future distributions along with all other BLMIS customers with allowed claims who are not yet fully satisfied.

The settlement also will further the SIPA Trustee’s avoidance and recovery efforts through additional discovery in other adversary proceedings in which the SIPA Trustee is seeking to recover more than a half-billion dollars of customer property.

“The SIPA Trustee’s settlement with the Defendants will result in a significant, direct monetary benefit for the BLMIS Customer Fund,” said Keith R. Murphy, partner at BakerHostetler, the court-appointed counsel to the SIPA Trustee. “This agreement furthers the interest of BLMIS customers by recovering all of the fraudulent transfers and preference payments alleged by the SIPA Trustee, resolving claims between the SIPA Trustee and the Defendants, and avoiding the cost and delay of what could otherwise be lengthy and contentious litigation.”

One hundred percent of the SIPA Trustee's recoveries will be allocated to the Customer Fund for distribution to BLMIS customers with allowed claims. As of today, the SIPA Trustee has recovered or reached agreements to recover approximately $10.64 billion and has distributed more than $7.2 billion, which includes more than $823 million in committed advances from the Securities Investor Protection Corporation (SIPC).

The costs associated with the SIPA Trustee’s recovery and settlement efforts are paid by SIPC, which administers a fund drawn upon assessments on the securities industry. No fees or other costs of administration are paid from recoveries obtained by the SIPA Trustee for the benefit of BLMIS customers with allowed claims.

The SIPA Trustee's motion – as well as information on overall recoveries to date, ongoing legal actions, settlements, and other issues – can be found on the SIPA Trustee’s website: www.madofftrustee.com.

The Bankruptcy Court will hold a hearing for approval of the settlement motion on April 16, 2015 at 10 a.m.

In addition to Mr. Murphy, SIPA Trustee Irving H. Picard and his Chief Counsel, David J. Sheehan, would like to thank SIPC counsel Kevin Bell and Nathanael Kelley who worked on this agreement, as well as the BakerHostetler attorneys who worked on both the Picard v. Defender adversary proceeding as well as the resulting settlement: Oren J. Warshavsky, Frederick W. Chockley III, John J. Burke, Katherine L. McKnight and Dena S. Kessler.

Press Release: Recovery Agreement Reached with Defender Feeder Fund

March 20, 2015
Claim Status as of March 20, 2015

As of March 20, 2015, the SIPA Trustee provides the following information regarding customer claims:

Total Claims 16,519
Total Determined Claims 16,519 100.00%
Allowed 2,551 15.44%
Determined - No Claim 12 0.07%
Denied 2,699 16.34%
Denied - Third Party 10,424 63.10%
Withdrawn 710 4.30%
Deemed Determined 123 .74%
Remaining To Determine 0 0.00%

Amount of Allowed Claims: $13,338,056,668.92
Amount of SIPC Coverage Provided: $698,419,646.98
(SIPC Committed of $823,750,279.82 less $125,330,632.84 subrogation payment) 

Claim Status as of March 20, 2015

March 17, 2015
Press Release: SIPA Trustee for Madoff Liquidation Seeks Supreme Court Review of Second Circuit Decision Regarding "Safe Harbor/Stockbroker" Defense in Madoff Ponzi Scheme

Press release from the office of Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS)

SIPA TRUSTEE FOR MADOFF LIQUIDATION SEEKS
SUPREME COURT
REVIEW OF SECOND CIRCUIT DECISION
REGARDING
“SAFE HARBOR/ STOCKBROKER” DEFENSE
IN MADOFF PONZI SCHEME

NEW YORK, NEW YORK – March 17, 2015 – Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC, today filed a petition for a writ of certiorari with the Supreme Court of the United States, seeking a review of the December 8, 2014 Second Circuit decision which bars the SIPA Trustee from recovering and distributing almost $2 billion to the victims of Madoff’s Ponzi scheme and calls into question an additional $2 billion of potential recoveries and distributions.

The Second Circuit’s decision upheld a ruling by a lower court which dismissed the SIPA Trustee’s complaints against certain “net winners” in the Madoff fraud – BLMIS customers who reaped “profits” from the Ponzi scheme by withdrawing more than they put in – and held that these defendants were exempt from the longstanding precedents in bankruptcy law and the Securities Investor Protection Act (SIPA), which hold that stolen cash can be recovered by a SIPA Trustee and must be distributed equitably among eligible claimants.

Certain “net winner” defendants asserted that since BLMIS was a stockbroker, their Ponzi scheme “profits” were protected under Bankruptcy Code section 546(e), the “safe harbor” defense, which protects transfers relating to securities transactions. These defendants, using this so-called “stockbroker defense,” alleged that their Ponzi scheme profits qualified for protection under section 546(e), even though no securities transactions occurred and the “profits” are nothing more than funds stolen from other BLMIS victims.

Noting the repercussions of the Second Circuit’s ruling, which precludes the recovery and distribution of $2 billion and calls into question $2 billion more of funds stolen by Madoff, the SIPA Trustee’s petition states, “The Second Circuit’s ruling in this case extends the stockbroker defense to encompass cash-for-cash transactions, in which no securities were ever bought or sold. The repercussions of that ruling for this case alone are profound . . . The Second Circuit’s ruling moreover sweeps in a broad array of cases involving insolvent brokers, gutting SIPA in the process.”

“This Court should grant certiorari to clarify the applicability of the stockbroker defense in such cases. Denying review would only perpetuate confusion and uncertainty at a time when investors can afford neither,” said Goldstein & Russell Partner Thomas C. Goldstein, Lead Appellate Special Counsel to the SIPA Trustee.

In addition, Mr. Goldstein said, “Congress did not write the stockbroker defense to address a case like this one, in which there were no securities transactions to unwind. Put another way, Congress obviously did not intend to protect the beneficiaries of a Ponzi scheme. Recovering funds paid to BLMIS customers who received fictitious profits from Madoff’s massive fraud would not create ripple effects through the marketplace. To the contrary, it would facilitate the herculean task of achieving equity for the victims of his fraud.”

Today’s filing asks the Supreme Court to review the following questions:

(1) Does the “stockbroker defense” in the Bankruptcy Code, 11 U.S.C. § 546(e), apply to payments that involve only fictitious securities transactions?

(2) Is the application of the “stockbroker defense” in the Bankruptcy Code, 11 U.S.C. § 546(e), to payments that involve only fictitious securities transactions barred as inconsistent with the Securities Investor Protection Act, 15 U.S.C. § 78fff(b)?

In addition to Mr. Goldstein, the SIPA Trustee would like to thank the attorneys who worked on his behalf on this petition including: David J. Sheehan, Tracy L. Cole, Thomas D. Warren, and Seanna R. Brown of Baker Hostetler LLP and Tejinder Singh of Goldstein & Russell.

Further information on the ongoing Madoff Recovery Initiative and a copy of the SIPA Trustee’s writ of certiorari filing can be found on the SIPA Trustee’s website: www.madofftrustee.com.

Press Release: SIPA Trustee for Madoff Liquidation Seeks Supreme Court Review of Second Circuit Decision Regarding "Safe Harbor/Stockbroker" Defense in Madoff Ponzi Scheme

March 13, 2015
Claim Status as of March 13, 2015

As of March 13, 2015, the SIPA Trustee provides the following information regarding customer claims:

Total Claims 16,519
Total Determined Claims 16,519 100.00%
Allowed 2,551 15.44%
Determined - No Claim 12 0.07%
Denied 2,699 16.34%
Denied - Third Party 10,424 63.10%
Withdrawn 710 4.30%
Deemed Determined 123 .74%
Remaining To Determine 0 0.00%

Amount of Allowed Claims: $13,338,056,668.92
Amount of SIPC Coverage Provided: $698,419,646.98
(SIPC Committed of $823,750,279.82 less $125,330,632.84 subrogation payment) 

Claim Status as of March 13, 2015

March 06, 2015
Claim Status as of March 6, 2015

As of March 6, 2015, the SIPA Trustee provides the following information regarding customer claims:

Total Claims 16,519
Total Determined Claims 16,519 100.00%
Allowed 2,551 15.44%
Determined - No Claim 12 0.07%
Denied 2,699 16.34%
Denied - Third Party 10,424 63.10%
Withdrawn 710 4.30%
Deemed Determined 123 .74%
Remaining To Determine 0 0.00%

Amount of Allowed Claims: $13,338,030,217.72
Amount of SIPC Coverage Provided: $698,393,195.78
(SIPC Committed of $823,723,828.62 less $125,330,632.84 subrogation payment) 

Claim Status as of March 6, 2015

March 02, 2015
Master Service List #40

Please open attached pdf file for Master Service List

Master Service List #40

February 27, 2015
Claim Status as of February 27, 2015

As of February 27, 2015, the SIPA Trustee provides the following information regarding customer claims:

Total Claims 16,519
Total Determined Claims 16,519 100.00%
Allowed 2,551 15.44%
Determined - No Claim 12 0.07%
Denied 2,699 16.34%
Denied - Third Party 10,424 63.10%
Withdrawn 710 4.30%
Deemed Determined 123 .74%
Remaining To Determine 0 0.00%

Amount of Allowed Claims: $13,338,030,217.72
Amount of SIPC Coverage Provided: $698,393,195.78
(SIPC Committed of $823,723,828.62 less $125,330,632.84 subrogation payment) 

Claim Status as of February 27, 2015

February 20, 2015
Statement regarding Second Circuit decision reaffirming that claimants in the SIPA liquidation of BLMIS are not entitled to time-based damages

Statement from the office of Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS)

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee & his Counsel at BakerHostetler:

Today's decision by the Second Circuit reaffirms the decision by the late Honorable Burton R. Lifland that claimants in the SIPA liquidation of BLMIS are not entitled to time-based damages. This decision represents an important milestone in the liquidation proceeding.

First, it resolves the question regarding whether customers are entitled to some form of interest on the dollars deposited with BLMIS that were never invested, but instead were stolen to give to other customers.

Second, and most important, this decision clears the way for the SIPA Trustee to distribute more than $1 billion dollars to customers with allowed claims. The only obstacle that could stand in the way of this additional distribution is the potential for a petition for certiorari by the defendants on this decision. The SIPA Trustee is hopeful that further delay will be viewed as pointless and that no petition will be filed. Regardless, he will immediately file an application to the Bankruptcy Court seeking approval of an allocation authorizing him to distribute, as soon as possible, the funds that have been held in reserve awaiting today's time-based damages decision.

The team in support of this effort by the SIPA Trustee consisted of David Sheehan, Seanna Brown, Jorian Rose and Amy Vanderwal, as well as attorneys at SIPC, Josephine Wang and Kevin Bell.

Statement regarding Second Circuit decision reaffirming that claimants in the SIPA liquidation of BLMIS are not entitled to time-based damages

February 20, 2015
Claim Status as of February 20, 2015

As of February 20, 2015, the SIPA Trustee provides the following information regarding customer claims:

Total Claims 16,519
Total Determined Claims 16,519 100.00%
Allowed 2,551 15.44%
Determined - No Claim 12 0.07%
Denied 2,699 16.34%
Denied - Third Party 10,424 63.10%
Withdrawn 710 4.30%
Deemed Determined 123 .74%
Remaining To Determine 0 0.00%

Amount of Allowed Claims: $13,338,030,217.72
Amount of SIPC Coverage Provided: $698,393,195.78
(SIPC Committed of $823,723,828.62 less $125,330,632.84 subrogation payment) 

Claim Status as of February 20, 2015

February 13, 2015
Claim Status as of February 13, 2015

As of February 13, 2015, the SIPA Trustee provides the following information regarding customer claims:

Total Claims 16,519
Total Determined Claims 16,519 100.00%
Allowed 2,551 15.44%
Determined - No Claim 12 0.07%
Denied 2,699 16.34%
Denied - Third Party 10,424 63.10%
Withdrawn 710 4.30%
Deemed Determined 123 .74%
Remaining To Determine 0 0.00%

Amount of Allowed Claims: $13,338,030,217.72
Amount of SIPC Coverage Provided: $698,393,195.78
(SIPC Committed of $823,723,828.62 less $125,330,632.84 subrogation payment) 

Claim Status as of February 13, 2015