The Securities Investor Protection Corp. is seeking data on clients’ withdrawals from as far back as they can remember, that could lay groundwork for clawbacks. [1]

Holy revictimization, Batman!  Did SIPC just go through an exercise in mailing out 8,000-odd sheets of fly-paper?  Looks like the big-time, long term Madoff investors who retained a large balance at the end but took significant withdrawals over the years have some heavy cost-benefit analysis ahead of them:

Of course, investors who prefer to disappear into the weeds need not file the form. But those wishing to make a claim for lost funds, and to get up to $500,000 per account from SIPC, must fill in the blanks and file their forms.

“The one absolute truth is that if a claimant does not submit a claim form to the Trustee, there is absolutely no possibility of any future distribution,” said Stephen Harbeck, president and chief executive of SIPC.

UPDATE: Just when you thought this story-arc couldn’t get any weirder, it gets weirder.[4]

Bernie Madoff’s investment fund may never have executed a single trade, industry officials say, suggesting detailed statements mailed to investors each month may have been an elaborate mirage in a $50 billion fraud.

Meanwhile, Madoff is truly starting to look like The Fraud That Ate Everybody.™ Now some companies are suspect because they didn’t invest in the scheme.[2]

For the past two decades, Wall Street watchers could count on four U.S. firms to land in the middle of every securities scandal. From Nasdaq price fixing to fake research to rigging the IPO markets to peddling toxic subprime assets, one could rest assured that Citigroup’s Smith Barney, Morgan Stanley, Merrill Lynch and Goldman Sachs would be heading the lineup. Their complete absence from the greatest Ponzi scheme in history raises the question: what did they know and when did they know it?

The answer may reside in a pentagonal structure created in 1999 to serve the interests of a Wall Street cartel.

So, Doomers, do you suppose they were also into sacrificing small animals? Looks like something I’ll have to bring up with the gang at HSTC 2120 next week Surely these guys who smelled a rat [3] have nothing to worry about, but you never know. The SEC didn’t follow up the leads they had, so who could possibly prove harm by people who didn’t blow the whistle?

—————-

[1]: "Feds put Madoff victims on hot seat", by Hilary Potkewitz, Crain’s New York, January 15, 2009.

[2]: "Wall Street Powerhouses Invested Alongside Madoff", by Pam Martens, CounterPunch, January 15, 2009.

[3]: "A few investors spotted Madoff’s red flags", by Elisabeth Butler Cordova, Crain’s New York, January 9, 2009.

[4]: "Madoff’s fund may not have made a single trade", by Jason Szep, Reuters, January 15, 2009.

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