Funds lacking for Madoff victims
Claims by victims of Bernard Madoff’s Ponzi scheme are far in excess of funds available to the Securities Investor Protection Corp. to reimburse them, the agency said in a letter to a congressional subcommittee.
As of Aug. 1, the SIPC had a total fund of $1.2 billion and access to as much as an additional $2.5 billion in loans from the Securities and Exchange Commission, SIPC President Stephen Harbeck said in a Sept. 7 letter to the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.
SIPC, which is required to pay victims a maximum of $500,000 for most claims, has allocated $888 million to pay claims based on lost principal. If forced to pay based on the account statements, the SIPC would have to pay an additional $1.1 billion, it said in the letter.