Educate me on this: Was Madoff’s a hedge fund? Do hedge funds have SIPC protection?
How are the reserve funds for SIPC allocated? If hedge funds have more confidentiality from government (including SIPC) oversight than mutual funds and brokerage houses, do they bear a greater share of the funding burden? Am I barking up the wrong tree or has there been egregious governmental neglect in this matter?
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about 1 year ago
i do believe there was tremendous gov’t neglect as the sec was warned numerous times about madoff and they failed to act…i do not believe that hedge funds have sipc protection.
about 1 year ago
From my understanding it was a 100% Ponzi scheme that used backdated stock numbers to hide the actions of this scheme. Since nothing was traded, it was not part of the SEC to investigate the actions. Since there was bogus material sent through the mail, the actions would probably fall under the Post Office (mail fraud) and the FBI (the Ponzi scheme). Wire fraud might also have been committed.
about 1 year ago
I’ve heard that SIPC might cover investors for up to $500,000 if they invested directly with Madoff and not through a middleman who placed the money with Madoff. Either way, it will take a long time to get the SIPC money.
about 1 year ago
Was Madoff a Hedgefund —- Yes
Do hedge funds have SIPC protection —– No
There is a current lawsuit claiming that b/c Madoff did have a brokerage business on a separate floor, that the Hedge fund, which was separate and run on a separate floor should have SIPC protection.
There is no legal basis for this, but with Paulson handing out taxpayer money to whoever asks, who knows, maybe we will be bailing out formerly rich, duped investors also
about 1 year ago
Madoff’s fund was NOT a hedge fund. The media likes to call it a hedge fund because they don’t understand exactly what was going on. Here is an article on on this very topic on my hedge fund blog – http://richard-wilson.blogspot.com/2008/12/bernard-madoff-hedge-fund-manager-notes.html
Hope this helps.
- Richard