Ponzi victims' anger now shifts from Madoff to SEC, SIPC
NEW YORK -- After hailing Bernard Madoff's 150-year prison sentence, some of his former investment clients turned their attention to the government systems charged with stopping financial scam artists and reimbursing its victims.
Rallying outside a Manhattan federal courthouse Monday, about 20 ex-clients who together lost millions to Madoff said they have been victimized by inadequate oversight before the fraud collapsed in December and questionable decisions and slowness in the ensuing repayment process.
Several carried signs specifically criticizing the Securities and Exchange Commission, the agency that failed to discover Madoff's scheme; the Securities Investor Protection Corp., the government-created insurance system that pays up to $500,000 to each client of failed brokerages; and Irving Picard, the court-appointed trustee seeking Madoff's assets on behalf of ex-investors.
Asked why she never suspected Bernard Madoff, former client Stephanie Halio stressed that the SEC investigated the financier, a former Nasdaq chairman, several times without finding evidence of any serious wrongdoing.
"My due diligence was the SEC. What greater due diligence can you have than the SEC?" asked the Boca Raton, Fla., resident. "They failed us. We have to fix the system."
Ronnie Sue Ambrosino, who with her husband, Dominic, lost $1.6 million to Madoff, said the SIPC and Picard should scrap an "incorrect" repayment formula that bases each victim's losses on the amounts they actually invested, rather than the larger, interest-boosted totals in Madoff's records.
"Today, the victims are no better off, financially, than they were yesterday," Ambrosino said.
The pace of an asset-seizure effort that has so far recovered just over $1 billion of the $13 billion to $65 billion fraud has unfairly forced some victims to rely on relatives and friends to survive, several victims who gathered at the rally said.
"Mr. Picard is not doing anything speedily," complained Halio.
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