Sale of Madoff Brokerage Won't Reimburse Investors
Victims who had hoped to recoup $50 billion worth of losses from the sale of Bernard Madoff’s brokerage will likely be disappointed by a report that estimates the brokerage will fetch no more than $10 million.
According to Bloomberg News, a profit report prepared by investment bank Lazard Ltd. concluded that the brokerage earned only $1.12 million last year. In addition, the brand is now tarnished because of the alleged Ponzi scheme that cost investors billions of dollars.
Recently, The Wall Street Journal compiled an extensive list of Madoff’s most over-exposed investors. In addition to those mentioned in our previous posting, some of the charities, hedge funds and banks that could sustain staggering losses include:
The British bank Royal Bank of Scotland Group PLC which had a potential exposure of almost $500 million as a result of trading through Madoff and collateralized lending to funds of hedge funds.BNB Paribas, a French bank, could lose up approximately $430 million through its trading business and collateralized lending to funds of hedge funds.
Spanish bank BBVA could lose almost $370 million if Madoff funds were not found to exist.
Man Group PLC, a U.K. hedge fund, estimates it could lose $360 million as a result of investing directly in Madoff funds and indirectly sub-advised by Madoff Securities and for which Madoff acts as a broker-dealer.
Brokers and hedge funds must conduct a due diligence investigation before turning a client’s money over to another investment firm. In the Madoff debacle, middlemen that acted as a go-between are now facing lawsuits from angry investors claiming a lack of due diligence.
Carey & Danis pursues numerous securities fraud cases on behalf of defrauded individual and institutional investors. Investors who wish to discuss their rights against Madoff Investment Securities or against companies that invested money with Madoff may contact Carey & Danis toll-free at 800-721-2519 or fill out our online contact form.
