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Trustee: No Evidence Madoff Bought Any Securities

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The Associated Press

Published: February 20, 2009

NEW YORK - The trustee in charge of untangling the mess brought on by the Bernard Madoff scandal told investors Friday there was no indication the disgraced money manager bought securities for his clients.

"We have no evidence to indicate securities were purchased for customer accounts," said Irving Picard, the court-appointed trustee overseeing the liquidation of Madoff's assets.

At a meeting for investors, Picard detailed the history of the case and how claims will be processed. He said his office has received 2,350 claims so far and they expect the number of claims to double.

Madoff was arrested in December after investigators said he confessed to his sons that he had swindled investors of $50 billion in a Ponzi scheme. The 70-year-old former Nasdaq chairman remains confined to his Manhattan penthouse under house arrest.

At the hearing, David Sheehan, a lawyer working for Picard, called the alleged fraud "a Ponzi scheme where no stock was purchased."

Picard said his office and criminal investigators are reviewing a mountain of evidence, including 7,000 boxes of records at a Queens warehouse that go back more than a decade.

He cautioned that the criminal investigation is ongoing and said: "We are operating out of a crime scene. There is a limit to what we can say."

Picard called the meeting at a museum in lower Manhattan for investors who lost money because of the alleged fraud. An auditorium that holds 460 was mostly full although it wasn't clear which of those attending had actually invested with Madoff.

Picard said he has recovered $650 million so far and noted that victims could qualify for up to $500,000 in funds from the Securities Investor Protection Corp.

Congress created the SIPC in 1970 to protect investors when a brokerage firm fails and cash and securities are missing from accounts.

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