It appears as though one great fraud deserves another. A group of Madoff victims is taking a page out of Bernie’s book and asking a federal bankruptcy judge to reconsider the way their losses are being calculated. Their magic formula is one part backward logic, one part betting that a judicial system that awarded damages to somebody who lost their psychic powers can get taken to the cleaners one more time.
The customers say that, by law, they should be given credit for the full value of the securities shown on the last account statements they received before Mr. Madoff’s arrest in mid-December, even though they were bogus and none of the trades were ever made. According to court filings, those account balances add up to more than $64 billion.
Papa Ponzi would be proud.
Victims of Madoff Seek Claims Overhaul [NYT]
Greg – Good post. Short, funny and to the point.
did you steal someone’s work and put your name on it? this was good.
Notice the astrisk, described as “winning” months
* Positive months or flat
The LSE should be shut down and sold to the Albanian Stock Exchange for 3 sheep and a handjob.
This kind of accounting is ridiculous and the company should be examined for ties to Madoff
Ceres Agriculture Fund -
Release of May 2009 Monthly Report
The Ceres Agriculture Fund Limited (“Ceres”), a new Guernsey domiciled, closed-ended investment company established to invest in an actively managed portfolio of exchange-traded agricultural commodity contracts and derivatives managed by FourWinds Capital Management is pleased to announce its results for the month of May 2009.
Overall Ceres gained 1.94% during the month leading to a composite annualised return of 3.31%. This was primarily driven by strong performance in grains.
A summary of performance is shown below.
Performance (USD Share Class):
Date
NAV
Fund (Net)
12/31/07
1.02
2.00%
1/31/08
1.03
0.98%
2/29/08
1.06
2.91%
3/31/08
1.04
-1.89%
4/30/08
1.05
0.96%
5/31/08
1.05
0.00%
6/30/08
1.09
3.81%
7/31/08
1.07
-1.83%
8/31/08
1.07
0.00%
9/30/08
1.05
-1.87%
10/31/08
1.04
-0.95%
11/30/08
1.04
0.00%
12/31/08
1.04
0.00%
1/31/09
1.03
-0.96%
2/28/09
1.02
-0.97%
3/31/09
1.02
0.00%
4/30/09
1.03
0.98%
5/31/09
1.05
1.94%
Performance Statistics:
Ceres
DJ AIG TR
Average Monthly Return
0.27%
-0.72%
Largest Monthly Return
3.81%
16.21%
Largest Monthly Loss
-1.89%
-16.48%
Comp. Annualised Return
3.31%
-8.26%
Percent Winning Months*
67%
50%
Sharpe Ratio (5%)
0.23
-0.29
Standard Deviation
5.66%
35.76%
Maximum Drawdown
-6.42%
-46.82%
Months in Max Drawdown
11
15
Months to Recover
N/A
N/A
* Positive months or flat
Breakdown by sector:
Grains
53%
Fibers
8%
Tropicals
12%
Livestock
26%
Cash
1%
Breakdown by strategy:
Discretionary Trading
95%
Systematic Trading
4%
Cash
1%
Trade horizon allocation:
Short term
29%
Medium term
50%
Long term
20%
Cash
1%
Contribution by sector (during the month):
Grains
1.46%
Fibers
0.10%
Tropicals
0.16%
Livestock
0.21%
A full report is available on the Company website: http://www.ceresagriculture.com
Further enquiries:
FourWinds Capital Management, Investment Manager and Co-Placing Agent
Kimberly Tara info@fourwindscm.com
Marc de Hennin
Cenkos Securities plc, Corporate Broker
Will Rogers +44 (0)20 7397 1920
Dion Di Miceli +44 (0)20 7397 1921
HSBC Securities Services (Guernsey) Limited, Administrator
Tel: +44 (0) 1481 707 000
Citigate Dewe Rogerson, PR Advisor
Sarah Gestetner /Lindsay Noton +44 207 638 9571
End.
This information is provided by RNS
The company news service from the London Stock Exchange
END
PFUSSDSAASUSEEM
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©2009 London Stock Exchange plc. All rights reserved
@3:
Thanks. You killed one of Greg’s *good* posts by flooding the comments.
OK! This is better than GS getting paid twice via the bailout and their AIG CDS!
A white person must be behind this scheme.
-TGFHouston
the zeros are pretty unimpressive. Fools
Some people claim the Ponzi never happened.
ANUS!
Trustee Irving Picard appears to be right on target with his handling of the ponzi aftermath.
TGFD says f’k all the claimants who want Captain Picard to handle their claims instead.
WTF is the matter with them anyhow?
The Guy from Delaware
Judge Chamberlain Holler: That is a lucid, intelligent, well-thought out objection.
Vinny: Thank you, your honor.
Judge Chamberlain Holler: Overruled.
GREAT POST!
IF EVERYONE ON THE VICTIM LIST GETS PAID THE FICTIONAL SUMS ON THEIR LAST STATEMENTS, WE THE TAXPAYERS WILL END UP BAILING THEM OUT! I FEEL FOR THEM, BUT ANY CONTRIBUTIONS TO HELP THEM OUT SHOULD BE ENTIRELY VOLUNTARY AND CHARITABLE IN NATURE.
Not a new Ponzi, simply THE LAW as to SIPC’s requirement to pay as per last client’s statement regardless whether its cash and/or securities so listed were actually bought or not, up to $500,000.
Clarifications are needed.
1) The media appears to to imply that Madoff customers are asking for an “overhaul”. This is misleading. The claims process being used for Madoff is different than what has been used in the past and it seems customers are asking SIPC to use its typical process vs. a new, revised one that seems to better serve SIPC (allow it to save money).
2) The media implies that the US Government (taxpayers) has to come in and fund the shortfall. This is misleading. If there is a shortfall, the US Treasury (via the SEC) will advance funds to SIPC. But this is in the form of a loan that would get paid back from future premiums that SIPC would assess to its broker dealer members.
A key reason for SIPC was to help rid brokers from the messy issues associated with processing security certificates. Instead of having customers or a third-party custodian hold physical securities, brokers are allowed to hold securities in street name (in broker’s name). This has provided immeasurable benefit to the industry as well as to customers. I doubt the industry would have grown like it has without this flexibility. But, if for whatever reason, customer securities were not available (including and particularly due to fraud), then SIPC would agree to replace them up to a value of $500,000. SIPC is changing their definition because they simply don’t have sufficient reserves to pay out on these claims.
This is very short sighted. Not honoring what is reflected in a broker’s statement (fictitious profits or not) puts in question the validity of holding securities in street name. It could also cast a chill on the many smaller broker dealers resulting in an undue advantage – with the largest, most well respected firms prospering. It’s no different than without real FDIC insurance, many customers will avoid smaller banks and put their money into only the largest ones.
The media is avoiding or ignoring the real underlying issue here. That is the “overhaul” that is really needed is with SIPC. This process of “blindly” providing SIPC insurance coverage to brokers is crazy. And, to depend on an outside party (SEC) to monitor your liability is illogical. I can’t imagine a real insurance company agreeing to such an arrangement. I believe SIPC needs to be changed so that it’s more in line with how the FDIC operates. Until this “overhaul” gets underway, the shenanigans of changing the way customer claims are processed is only going to hurt the industry in the long run.
With the growth in the securities industry and no growth in the insurance limit $500,000 since 1978, SIPC should be able to make up this shortfall very easily. And Congress, the SEC and SIPC should use this experience to reform how it operates – not focus on how it can unlawfully avoid its current liabilities.
see lawsuit here: http://www.madoff-help.com/wp-content/uploads/2009/06/madoff-class-action_complaint_for_declaratory_judgment.pdf
SIPC is basing its position of “cash in less cash out” on a distorted definition of net equity, which is supposed to be determined, under SIPA,” by…calculating the sum which would have been owed by the debtor to such customer if the debtor had liquidated, by sale or purchase on the filing date, all securities positions of such customer. ” 15 U.S.C. Section 78lll(11).
To put it simply, the Madoff clients are entitled to what they had been told they had as of their last statement before the bankruptcy petition was filed – under the law. Under Rule 502, adopted by SIPC, and under the New Times case, it doesn’t matter if the securities weren’t bought. If they were real securities that could have been bought, the Madoff account owners are entitled to them or their cash equivalent, as long as they were sent a written confirmation of each transaction by the broker, i.e. Madoff, which they were.
Therefore, they are entitled to all of their illusory profits – under the law, according to 17 C.F.R. Section 300.502. And under the New Times case, In re: New Times, 378 F.3d. 68 (2nd Cir. Court of Appeals, 2004) . And even according to what the President of SIPC, Herbeck himself, said from the original bankruptcy proceeding, In the Matter of New Times Securities, Inc., Case No. 800-8178.
None of this is opinion on my part – it’s the law. And it’s what the SIPC Trustee in New Times paid to people like the Madoff victims in the New Times case, without any of those people having to appeal.
It appears that the Trustee and SIPC wil lose this round.
Your spin has it all wrong-they want the maximum 500,000 SIPC fund money per account on the basis that the act creating the SIPC was supposed to protect their reasonable expectations by insuring losses for the securities they reasonably believed they had in their accounts. If the fraud had been anything but a ponzi scheme-for example-if the broker simply stole their money or the securities stated to be in the account, the SIPC would pay them their 500,000 each withoutr qualms. However, by labeling the fraqud a ponzischeme, he is trying not to pay them anything. they were defraquded-they don’t care what kind of fraud it was that cost them their savings. Nor are they asking for money from other victims-they onlyh want the SIPC fund money. That is perfectly reasonable, particularly considering that the SEC dropped the ball asnd essentially told them that Madoff was OK.
The first thing we do, let’s kill all the lawyers.
The first thing we do, let’s kill all the lawyers.
#12 & 13: The big question is can you bill your client for the time you spent posting on a blog?
- Insert pejorative comment about Jewish people here -
Guest@#17…
TGFD thinks #12 & #13 provided valuable public service in their posts. Thanks to them, I have a much better appreciation for the issue. They gave us clarity.
The Guy from Delaware
TGFD: then you’re a sucker. These posts were obviously written by a lawyer representing the claimants and are totally slanted in their favor. Its as if he’s practicing what he’s going to say in front of a judge.
The elemental consideration here is if in fact the balances are protected under SIPC. A very good argument can be made that these were not brokerage accounts and thus not protected. The victims understandably see making such claims as more honorable than applying for welfare, but in the end its really the same thing.