Madoff Victims To Share In Over $10.3 Billion Of Recovered Money, Bigger Than Expected - Report

Tom Burroughes

18 November 2014

Victims of Bernard Madoff’s Ponzi scheme, the biggest crime to be exposed amid the financial crisis, will share in more than $10.3 billion recovered by a bankruptcy trustee, way ahead of initial estimates, according to the Financial Times.

The newspaper cited a court filing yesterday.

Yesterday, Irving Picard, the bankruptcy trustee, said he had agreed to settle negotiations with Herald Fund SPC and Primeo Fund, two feeder funds which brought clients’ money to Madoff, the FT said. The two Cayman Island-based funds, which are both in liquidation, will pay $497 million to a customer fund.

If the settlement is approved, that means 58.9 per cent of the $17.5 billion in lost principal in the scam would be recovered, the report said, noting that over $6 billion has already been distributed to investors who were cheated in the scheme.

Madoff pleaded guilty to the fraud in 2009 and was sentenced to 150 years in jail. His crimes provoked a round of soul-searching in the wealth management industry around the amount – or lack – of due diligence that is carried out into investments. A number of high-profile institutions, including Man Group and Swiss bank Union Bancaire Privee, were hit by Madoff-related entities. Since his crimes were exposed, European and US regulators have sought to tighten controls on hedge funds and similar investment vehicles although it remains to be seen if such rules would have prevented a Madoff-like criminal.