The agency liquidating Bernard Madoff’s brokerage says the $2.6 billion it has on hand is enough to satisfy all legitimate claims by victims of the money manager’s $65 billion Ponzi scheme.
This is good news, right? I was flabbergasted by the following:
Some Madoff investors are up in arms about SIPC’s decision, announced by Picard at a Feb. 20 creditors’ meeting, to limit victim claims to “net equity” — cash invested minus sums taken out. That formula ignores profit reported on customer brokerage statements for the past 20 years, gains that were fictitious because Picard found no evidence Madoff had made any trades or profits going back decades.
I can’t think of any reason why the victims should be compensated with the money that never existed. Am I cold-hearted? I am not in any way saying that the Madoff victims are responsible for their victim-hood, but let’s be honest there were many people who invested and lost money in the past year from completely legitimate investment funds. Rewarding people who participated in a scheme, granted unwillingly, makes no sense. Why should they profit when many others didn’t.
A lot of people have blamed the victims of Madoff for being greedy. I think that is unfair to people who have clearly suffered quite a bit by the selfishness of this man. Now, I’m thinking that maybe they are a little greedy.