SIPC To Cover People Duped In Madoff Scandal

Breaking on CNBC the SIPC will cover the people who lost millions and even billions in the Madoff scandal. So there is another $50 billion dollars out the door. I highly doubt they will only cover the $500k per person per SIPC rules it didnt specify for sure but Im guessing they will get all their money back if not most. Im not sure where the government is going to get the money but hey just get it where they got the other $8.5 trillion. Is it the governments job to cover people who loses in investments? If the government is covering losses I want my piece. Ive lost a ton of money in the market because of the government where is my piece of the pie? Really I dont want one I took a risk and I paid for it. So did these guys. There is no free market. You can take all the risk you want and get bailed out. America is doomed.

[edit on 19-12-2008 by tjeffersonsghost]

Im actually shocked this isnt getting anymore play. I figured people would be ticked that people who took losses are getting their money back from the government. Maybe with all the bailouts nothing surprises anyone anymore.

the SIPC only covers up to $500k. If they recover any money from Madoff's assets, then the SIPC pays less. if, by some freak chance, they get more than $500k from the assets, they won't get a nickel from the SIPC.

reply to post by tjeffersonsghost


they can do this for people who loose millions but not victims of disasters like Katrina? Some people to this day are living in shelters and trailers, their insurance companies refuse to payout.

that's absurd,

if Madoff clients will be covered for ALL their losses,
then we should officially be called the BAILOUT NATION.

other hedge funds will follow, and soon enough we
gonna have 90% tax everywhere.

after that - slavery, is the next stop.

SIPC insurance is kinda similar to FDIC inusrance. However, it seems that an exception is being made in the Madoff case for people who lost money. SIPC insurance rules previously stated they didn't cover a nickel if fraud was involved.

reply to post by jefwane


actually, SIPC is set up to cover for fraud.

www.sipc.com...

reply to post by Crakeur


From your Link Crakuer.

"Insurance" for investment fraud does not exist in the U.S. The Federal Trade Commission, Federal Bureau of Investigation, state securities regulators and other experts have estimated that investment fraud in the U.S. ranges from $10-$40 billion a year. In the case of microcap stock fraud, the toll on investors has been estimated as $1-3 billion annually.

With a reserve of slightly more than $1 billion, SIPC could not keep its doors open for long if its purpose was to compensate all victims in the event of loss due to investment fraud.

It is important to understand that SIPC is not the securities world equivalent of FDIC–the Federal Deposit Insurance Corporation. Congress specifically considered creating a Federal Broker-Dealer Insurance Corporation, but lawmakers wisely concluded that such a designation would be both misleading and out of step in the risk-based investment marketplace that is so different from the world of banking.

From Crakuer's SIPC link


OK, so I was incorrect in saying SIPC was like the FDIC. I'll agree to disagree about the SIPC previously being set up to handle fraud. I'm not saying that they won't do it in this case. They've been changing the rules on a whim lately anyway. If it weren't so sad I'd find it ironically funny that alot of supposedly sophisticated, in some cases formerly rich investors are now in the same boat as someone unsophisticated who signed an exploitative mortgage.


[edit on 21-12-2008 by jefwane]

Right, so a person is stupid and greedy enough to invest their millions in something so unsound and the public have to pay them back?

WTF America?

Why aren't you damn angry?
What the hell is going on in your country?

They protest in Greece over the shooting of a kid, and the entire American nation are being plunged into poverty while your government pays out trillions to already wealthy people, and you all just sit there like idiots thinking "oh well..."


I always fought the common misconception that all Americans are dumb, but you all seem to be supporting that theory really well.

Just wait, when you're all desperate for food, a job and a roof over your head, the rest of the planet will gladly remind you that you let all of this happen.

Originally posted by detachedindividual
Right, so a person is stupid and greedy enough to invest their millions in something so unsound and the public have to pay them back?

WTF America?

Why aren't you damn angry?
What the hell is going on in your country?

They protest in Greece over the shooting of a kid, and the entire American nation are being plunged into poverty while your government pays out trillions to already wealthy people, and you all just sit there like idiots thinking "oh well..."

I always fought the common misconception that all Americans are dumb, but you all seem to be supporting that theory really well.

Just wait, when you're all desperate for food, a job and a roof over your head, the rest of the planet will gladly remind you that you let all of this happen.

I agree. What the hell is going on when the government will give money that was stolen to them by a high profile Ponzi scheme artist? Jesus! If I had known that I could have made a little something something out of it and then lost my butt that the government would then foot the bill I would have joined that group a long time ago.


This just isn't right.





Can anyone tell me what kind of job I need to get that the government will bail me out when times get tough? The job I have now the government wouldn't help us.

Maybe I need to sell cars or get into real estate, or maybe just become an "investor" in Ponzi schemes. Then the government will put me on a permanent welfare that is suitable to the lifestyle of which I have become accostomed.


Anyone else have any ideas? Maybe the insurance companies are next.

But I'll tell you one thing that isn't on the list:

veterinarians
cattle hearders
fast food workers
photographers
sam's club employees
mall workers
cab drivers
t-shirt makers
hair stylists
grocery store workers
landscapers
pool diggers
window washers
office supply workers
manicuirists
staple makers
diners
waitresses


You get the idea.

Originally posted by jefwane

From Crakuer's SIPC link

[...] a lot of supposedly sophisticated, in some cases formerly rich investors are now in the same boat as someone unsophisticated who signed an exploitative mortgage.

You are almost saying that the SIPC, should be the proper venue in
the bailout of the toxic Troubled Assets...


Let's leave the MortgageBackedSecurities out of the TARP...just like when the crisis began in Freddie/Fannie nationalization...the $1Bn solution took care of that freezing of the mortgage monies, and programs to restructure those sub-prime/Alt A loans...


The TARP monies, now over $7.2Bn, are not centered on mortgage loans nor most of the falsely rated AAA bonds that were packaged around these mortgage debts and some CDOs.(default-obligations)
The TARP monies being thrown at the remaining major banks/brokerage/financial houses are 'securities' (that should be covered by the SIPC) not by the Treasury or the FedReserve...

Those securities which the TARP monies are bailing out are mainly unregulated CDS (credit-default-swaps) and other derivatives..., which are more like raffle-tickets or 'bets' at a local back-alley Sports Bet Casino...
know also those 'securities' had no collateral to back-up or insure payment of the original purchasers position... other than the money paid in by later bettors (Ponzi scheme) for additional Swaps or Counter-Party bets related to another industry/sector/corporation...

a multi-trillion (est. @ $500-600Tn) Ponzi scheme, given validation by Paulson @ Treas & Bernanke @ Fed...
and congress (knowingly or naively) awarding bailout $$$....
instead of tossing the scam unto the lap of the SIPC for resoultion and possible criminal charges.


read-em-and-weep, Madoff is the only one getting caught & punished
for a similar but smaller scam

[edit on 21-12-2008 by St Udio]

reply to post by St Udio


That wasn't what I was trying to say. What I was trying to say is, I thought it was understood that SIPC didnt' really insure against fraud. Apparently in this case it might. I was just trying to compare Madoff investors to people who bought bubble homes.Unfortunately both will probably get a bailout the way things are going.

reply to post by jefwane


Oh... i regret saying it.

but, the way i see it the Madoff securities fraud built on a Ponzi scheme
is very similar to what the banksters/money makers conducted on other investors...
the mortgage crisis is only a snowball compared to the glacial size of the derivatives securities scam, also funded in a Ponzi scheme.
Which-incorrectly- is being bailed out with the TARP $$ instead of SIPC $$

Wow.....the perfect crime.......

Pin the old guy, extort the money, and then collect more later when fraud comes to play.

Originally posted by uplander
....or maybe just become an "investor" in Ponzi schemes. Then the government will put me on a permanent welfare....

Maybe you already are uplander?



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