In case you haven’t noticed, Liquidators cop a fair bit of flack in Australia regarding their fees. Well strap yourself in and observe the fee frenzy surrounding the liquidation of Bernie Madoff’s Funds in the USA – fees have just topped $1 billion.
Madoff set up his investment funds in the 1960’s and it looks like the Ponzi scheme started around the same time. By the time the scheme fell over, investors had plugged in principal of around $17 billion. Madoff and five key employees created millions of fake trades over the years.
Irving Picard, a bankrutcy lawyer, is leading the job of a lifetime. The vast majority of recoveries have not come from realising the assets of the Funds, as there wasn’t much there at all. No, realisations have come from hundreds of lawsuits and settlements with other Funds and Banks that directed their clients money into the Madoff Funds. Overall recoveries have just topped $10 billion. So far over $6 billion has been paid to investors in the Funds and there is talk of investors being paid their full principal of $17 billion. And last November, Picard’s fees ticked over the $1 billion mark.
And if you are wondering what has happened to Madoff himself, well he is serving a 150 year sentence at a prison in North Carolina. Seven of his co-workers have also pleaded guilty to various offences and that includes Bernie’s brother who is serving 10 years.