Saturday, March 28, 2009

Clawbacks for Joe Sixpack, Billions for Goldman

"Investors who lost money with financier Bernard Madoff are girding for potential 'clawback' suits that might be brought by the trustee in charge of liquidating Mr. Madoff's firm. ... The alleged Madoff fraud is now being viewed as a classic Ponzi scheme. ... Under the bankruptcy code those who will be most susceptible to a clawback are investors who withdrew any money in the 90 days before Mr. Madoff's arrest in Dec. 11, attorneys say. ... New York state law allows [Irving] Picard to seek funds transferred from Mr. Madoff's firn in the past six years. Investors may be asked to give back profits and some of their initial investments to help offset losses by other investors. ... Attorneys say it is likely that some Madoff investors are pursuing a variety of strategies to protect their assets from the trustee. Few are likely to trumpet them, since such moves could be viewed as a fraudulent conveyance, the illegal transfer of property with the intent to commit fraud", Jane Kim at the WSJ, 12 March 2009.

Compare the Madoff investors' fate to that of AIG's counterparties. What a country. See my 21 November 2008 post: http://skepticaltexascpa.blogspot.com/2008/11/bust-outs-and-paulson-mob.html. Uncle Sam robs peasants to feed Goldman Sachs and other Wall Street hogs. Innocent investors who took some of their funds back from Madoff may be subject to "clawback". This is why Zimbabwe Ben can't let AIG go bankrupt. Lots of things could become public the "usual suspects" want to conceal. Ready that CNC guillotine. It has a lot of work to do. See also my 18 December 2008 post: http://skepticaltexascpa.blogspot.com/2008/12/deprizio-doctrine-and-aig.html.

2 comments:

Anonymous said...

IA... it's kinda cool to watch specific members of the media go after the GS/AIG story...

It is like a pack of hounds after prey... right on... flush out the nonsense...

I saw a clip of the GS prez explaining how they had paid $100 million on AIG CDS and that's why they got the $8+ bln... casino returns... time to explain that trade to Elijah and other members of Congress ... that might balance out the fawning of Pres-O to the bankheads....

Anonymous said...

Interesting as SIPC appears to be a classic insurance company "bustout," wherein they took in inadequate fees to pay any contingent liabilities, i.e., last 14 yrs or so just $150 per broker dealer, in exchange for insuring the brker accounts up to $500,000 each.

No wonder why SIPC has changed the definition of "net equity" to entirely exclude the books & records of the bankrupt broker dealer per account, i.e., Madoff, and the reasonable expectations of anyone receiving their monthly statements, in order to save themselves. No doubt, SIPC will lose on appeal, that is, after their bankruptcy court lacky, judge Lifland, denies complaints as to SIPC's newly invented definition as per the 2/2/2010 hearing.

And absolutely amazing that Irving Picard is allowed to serve as Trustee of the Madoff bankruptcy, and, at the same, time, represent SIPC vs. the Madoff victims. This is a judicial conflict of interest, and corruption, of the very highest order!