You are here: Home - Investing -

Madoff compensation claim deadline looms next week

Written by:
The Financial Conduct Authority (FCA) is reminding investors that the deadline for filing for compensation from the Madoff Victim Fund (MVF) is the last day of February.
Madoff compensation claim deadline looms next week

Investors who lost money investing in Madoff Securities may be eligible for compensation from the fund, which is overseen by the US’ Department for Justice and will return more than $4bn to victims.

The Madoff scandal was a Ponzi-style securities fraud that ran for decades and saw cash flow into Madoff Securities through investment partnerships, funds of hedge funds, trusts, UCITS, insurance and annuity programs and many other types of financial products.

Mastermind of the scheme Bernard Madoff, (pictured) was arrested on 12 December 2008 and is serving a 150-year sentence, after confessing to a $50bn fraud. The trustee liquidating Madoff’s New York investment firm said customers lost about $17.3bn (£10.7bn).

The fraud hit banks, including J.P. Morgan, hedge funds and individual investors. Madoff claimed both banks and funds knew what he was doing.

The appointed ‘Special Master’ of the compensation fund Richard C. Breeden said: “[The scandal] inflicted immense financial harm and personal anguish on victims around the world.

“Madoff’s appetite for cash was voracious, and thousands of investment products or funds were used to raise money.

“Investor money was often routed through multiple entities before reaching Madoff Securities.”

Although a large majority of victims have gone five years without a significant recovery, they will now be able to recover funds if they had their own money invested in Madoff Securities and “suffered an actual loss when the fraud was exposed”.

The MVF runs alongside a bankruptcy program, which compensates claimants which held a direct account with Madoff Securities. However, this was a distinct minority.

Breeden said: “Out of approximately 16,500 claims in the bankruptcy proceedings, claims covering only 2,186 accounts were allowed (roughly 18%). More than 14,000 bankruptcy claims were rejected, most commonly because the individual invested through a feeder fund or similar entity.”




Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
London landlords earn double national average

London landlords received an average annual return of £38,000 over the past 12 months, more than double the amount received...