WASHINGTON, Nov. 17, 2014 /PRNewswire-USNewswire/ -- Once approved by the United States Bankruptcy Court for the Southern District of New York, a new settlement involving $497 million with the Herald Fund and Primeo Fund will increase the total recovery to date in the Bernard L. Madoff Investment Securities LLC (BLMIS) liquidation proceeding to $10.3 billion. The two feeder funds were primarily invested in BLMIS.
To date, the BLMIS Trustee has allowed 2,528 claims related to 2,198 Madoff accounts. Of these accounts, 1,131 accounts – or all allowed claims totaling $925,000 or less – now have been fully satisfied in the amount of nearly $6 billion.
The Securities Investor Protection Corporation (SIPC) praised Trustee Irving H. Picard and his attorneys for their ongoing hard work in recovering and returning funds to Madoff customers. SIPC, which was actively involved in the negotiation and mediation efforts, also recognized the efforts of Kevin Bell and Lauren Attard on its legal staff in helping to bring about the complex settlement announced today.
SIPC President Stephen Harbeck said: "The prospect of amassing $10 billion in recoveries for Madoff victims was not viewed by many as a serious possibility at the start of the case. The legal tools available to Trustee Picard under the Securities Investor Protection Act and the Bankruptcy Code have made it possible for him to make the most equitable distribution possible. I am hopeful that this settlement will serve as a template for the resolution of other so-called 'feeder fund' claims. We are pleased at the results as we continue to work with the Trustee towards our shared goal of fully satisfying as many BLMIS allowed claims as possible in an expeditious manner. As remaining legal disputes continue to be resolved, we look forward to sharing news of additional distributions to Madoff customers."
The nearly $6 billion in BLMIS distributions to date includes approximately $816.2 million in committed advances by SIPC to satisfy Madoff customers.
Since SIPC bears all of the costs of administration, such as legal and accounting fees in the liquidation, all of the assets recovered in litigation and settlements go directly to customers.
The Securities Investor Protection Corporation (http://www.sipc.org) is the U.S. investor's first line of defense in the event of the failure of a brokerage firm owing customers cash and securities that are missing from customer accounts. SIPC either acts as trustee or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds.
The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities - such as stocks or bonds -- that are already registered in their names or in the process of being registered. At the same time, funds from the SIPC reserve are available to satisfy the remaining claims for customer cash and/or securities held in custody with the broker for up to a maximum of $500,000 per customer. This figure includes a maximum of $250,000 on claims for cash. From the time Congress created it in 1970 through December 2013, SIPC has advanced $ 2.1 billion in order to make possible the recovery of $133 billion in assets for an estimated 772,000 investors.
All non-media/investor inquiries of SIPC should be directed to [email protected] or (202) 371-8300.
SOURCE Securities Investor Protection Trust, Washington, D.C.