Who Gets the Rest of Madoff's Money?

February 9, 2009— -- In what could be the latest chapter of a battle over who gets their hands on the remainder of Bernard Madoff's money, the Securities and Exchange Commission said today it had reached a partial agreement with the accused Ponzi schemer.

The SEC, bankruptcy lawyers and attorneys for individual victims have all begun efforts to track down and stake a claim of what's left of the $50 billion that the alleged fraudster reportedly told investigators was lost in his scheme.

Today, Madoff agreed to a proposed judgment with the SEC where he could eventually pay a civil fine and return money to people who had invested with him.

Madoff agreed not to contest the allegations against him by the SEC for the purpose of the SEC recovery of any assets and return of those assets to investors in a proposal submitted to a federal judge.

He did so without compromising his rights in the ongoing criminal case against him in federal court in New York or admitting to any of the allegations against him filed in the criminal complaint when he was arrested on Dec. 12, SEC officials said.

Those allegations included the charge that he "informed two senior employees that his investment advisory business was a fraud..(and) told these employees that he was "finished," that he had "absolutely nothing," that "it's all just one big lie," and that it was "basically, a giant Ponzi scheme," according to the SEC filing.

The SEC proposal for a "partial judgment and a permanent injunction" seeks a court order that makes permanent the freezing of Madoff's assets and right to recovery that were ordered by the court in a preliminary restraining order granted Dec. 18. The injunction component is really a technicality at this juncture. It enjoins Madoff from any future violation of federal anti-fraud statutes. The provision would come into play if he were found not guilty in his criminal trial, or upon his release from prison if he were found guilty.

The SEC action is one of the three major actions involving Madoff.