Your posting is powerful.

I am a Madoff victim and have been thrust right smack dab in the middle of this mess. As the Coordinator for the Madoff Coalition for Investor Protection group, we have been working closely with Helen Davis Chaitman so that the victims will see the fair justice they are legally entitled to.

As victims, we have the facts and we have the law on our side. However, our frustrations are two-fold.
First, how do we get this information out so that all investors are aware of the facade of protection offered by SIPC?

Secondly, how is it that with statutory law and case law on our side the SEC, who has the mandated responsibility to ensure SIPC follows the rules that Congress laid out for them is not being taken to task for not stepping in?
This is yet another failure of the SEC to take the responsibility to ensure fair and safe markets for investors.

Your posts and your guests help to spread the word to all, and we greatly appreciate that effort.

Yet, we need to get Congress, Wall Street and the White House to hear us. We are speaking loud, but feel as if no one is listening.

Great post. I had no idea about the $150 fee. It’s ridiculous.

I have, however, observed other troubling aspects about SIPC beyond the funding issue. For one, the agency’s communications about what they cover are unclear. Check out the website:http://www.sipc.org/how/covers.cfm.

SIPC will reimburse customers for securities that are missing, but it does not insure against fraud. What does this mean? Here’s an example of where we could use some clarity.

SIPC recently noted it is paying out $500 million to Madoff victims, which suggests the securities were stolen (not fraud?). But if SIPC agrees to pay for missing securities, why pay only $500 million now? The Madoff trustee has agreed that at least $4.5 billion is eligible for payment. SIPC made the decision to pay. Why not pay more right away?

Speaking of the Madoff trustee—there’s a huge conflict of interests. SIPC pays the Madoff trustee, and some estimates place the trustee’s compensation at $60 million. The Madoff trustee has the power, however, to distribute assets in a way that helps SIPC to the detriment of Madoff victims. That’s why there’s a huge argument over “net equity.” No matter your position on how Madoff victims should be treated, this conflict of interests is not right. I go into more detail here: http://acrimoney.com/2009/07/07/whats/.

In my opinion, this $150 fiasco is another reason why Uncle Sam should clarify what SIPC is doing for us.

Norb

The market price action today indicates to me a general lack of depth and participation. Wild swings occur in the midst of light volume. Light volume occurs when there is a general lack of conviction.

One further question would be: What is the notional value of the claims submitted to date and still pending