Madoff victims finally get first cut of repayment
While 71-year-old Bernie Madoff sits tight in a North Carolina prison till he’s, say, 221 … life goes on.
It might seem weird to think, because when the Ponzi scammer was sentenced to 150 years in jail earlier this year, much of the public closed that chapter. The bad guy got what he deserved, now let’s move on.
Well, for about 1,558 people, it’s not that easy.
Despite how you or I were (likely not) affected by Madoff’s scheme, we forget sometimes that there’s still a lot of money out there unaccounted for. Money stolen, in a sense, from victims that they may never retrieve.
But, for whatever it might be worth, here’s a start.
The liquidator for Madoff’s New York-based investment firm has approved initial repayments of $534.2 million to the 1,558 scam victims whose claims were approved (1,303 alleged financial casualties were denied access to the payout fund).
The $530+ million is just a drop in the bucket, admittedly. According to Bloomberg, verified losses from Madoff’s fraud are said to exceed $21 billion.
Yet healing takes time, and so will this. Money from the initial victims’ payout has arrived primarily from the liquidation of Madoff’s assets, which include his $7.5 million Manhattan penthouse we covered last month. There is more to come, though.
Madoff’s liquidation team has already recovered $1.4 billion in assets to repay would-be investors, and have filed “so-called clawback lawsuits” that seek the return of about $15 billion in fake profit from the arch-fraudster’s biggest beneficiaries, Bloomberg says.
By Jason Buckland, MSN Money
Posted by: Dave Brown | Oct 31, 2021 7:18:51 PM
It might be somewhat simplistic to figure that the largest deception ever perpetrated in the history of capital markets would not have a larger impact than simply the investors for whom Madoff was the steward.
(A) The affect of negative media coverage, and resulting pessimism / cynicism of the financial services sector will continue to plague many current investors and even potential investors who are now "snake bitten" and reticent to trust anyone to plan financial security on their behalf.
(B) Behavioral economics suggests that investors are prone to market sentiment. A massive sell off which was triggered by the negative news created downside pressure on stock prices, likely affecting some investors' decisions to maintain their positions in the market, despite having no exposure to Madoff.