One of the many lessons Bernie left behind is that it pays to hedge. It helps to prevent mild irritants like losing everything you had when the guy you entrusted all of your assets to turns out to be more of a masterful liar and thief than an investment demigod. But if you elected not to hedge the first time around, you probably will the next time. Two people burned by King Ponz have apparently learned their lesson and are hedging their exposure to the next phase of the Madoff saga, the lawsuit free-for-all.
Phyllis Molchatsky and Steven Schneider lost approximately $2.5 million (combined) courtesy of Bruiser and are spreading the wealth around when it comes to where they intend to get their money back from. Sure, they could wait around and see what the trustee comes back with but why not explore other avenues targets. Such as the SEC.
"Bernard Madoff is obviously the chief culprit in the scheme that imploded so shockingly in December 2008. However, the SEC must be held accountable and responsible for its own negligent actions and inactions that directly and proximately caused the loss of billions of investor funds," the lawsuit said.
The lawsuit accuses the SEC of failing to follow its own procedures and says the agency "cannot evade accountability with a shield of immunity that is designed to be reserved for policy decisions."
Correct. You shouldn't be able to evade accountability for actions considered to be routine procedures in investment matters- like hedging in the first place.
Two Investors Sue SEC Over Madoff Probe [WSJ]