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Manager Selection

Madoff Victim Fund Distributes Another $568 Million

The seventh distribution brings the total compensation to victims of the world’s largest Ponzi scheme to more than $3.7 billion.
By Michael Katz


The Madoff Victim Fund, which was set up by the US Department of Justice, has begun its seventh distribution since 2017 to repay the nearly 31,000 victims of the late Bernie Madoff’s massive Ponzi scheme. The payout will include approximately $568 million in additional funds and raise the total amount distributed so far to more than $3.7 billion.

It is the first distribution made by the fund since last December, when it doled out $488.1 million, and it brings the total recovery from all sources of compensation to 81.35% of losses. Additionally, more than 2,600 victims will receive their first payments in the distribution.

The fund will eventually return to victims more than $4 billion in assets that have been recovered as compensation for losses suffered by the collapse of Bernard L. Madoff Investment Securities (BLMIS) in the wake of the largest fraud in history. Another $5 billion in assets recovered by the US Attorney’s Office will be paid separately to Madoff victims through the BLMIS Customer Fund.

“This office continues to seek justice for victims of history’s largest Ponzi scheme,” Manhattan US Attorney Audrey Strauss said in a statement. “But our work is not yet finished, and the office’s tireless commitment to compensating the victims who suffered as a result of Madoff’s heinous crimes continues.”

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In March 2009, Madoff pleaded guilty to 11 federal felonies and admitted to running the world’s largest Ponzi scheme. In June of that year, he was sentenced to 150 years in prison and ordered to forfeit $170.8 billion. The Madoff Victim Fund is funded through recoveries by the US Attorney’s Office in various criminal and civil forfeiture actions and is overseen by Richard Breeden, the former chairman of the Securities and Exchange Commission (SEC). Madoff died in prison in April at age 82.

Of the approximately $4.05 billion that will be made available to victims through the Madoff Victim Fund, $2.2 billion was collected as part of the civil forfeiture recovery from the estate of Jeffry Picower, a deceased Madoff investor. Another $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank for Madoff-related Bank Secrecy Act violations. 

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Home > News > Market Moves > Buy the Dips Is So … Last Month
Market Moves

Buy the Dips Is So … Last Month

Investors’ habit of bagging stocks during temporary slips could be going away, El-Erian warns.

By Larry Light


Buying the dips has been a standard strategy throughout the pandemic rally. But Mohamed El-Erian thinks that could be over.

In his view, not scooping up relative bargains when the stock market drops may explain why September thus far has been so choppy for equities. “Until very recently, the behavioral aspects of this market were ‘buy the dips, there is no alternative, and fear of missing out,’” said El-Erian, Allianz’s chief economic adviser. “Those three came together, and every single fall was quickly reversed.”

Analysts have floated any number of reasons for the sudden negative reaction in the market recently: uneasiness about high inflation, doubts about what the Federal Reserve will do and when, and suspicion that the long rally is getting old and frail. To El-Erian, who previously headed bond house PIMCO, the source of this seeming pullback isn’t easy to divine, yet he urged investors to pay attention to the psychological forces at play.

“What we’re not seeing the last few days—this month, in fact—is that behavior” of buying on the dips, El-Erian told CNBC. “Now, part of it could be because the inflation jitters put in doubt the ability of the Fed to orderly, orderly, normalize. Part of it may be elevated prices. Part of it may be it’s temporary.”

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While the S&P 500 rose 0.85% Wednesday, this month—usually the worst of the year for the market—has had a rocky start. Every trading day last week was down, for a minus 1.7% weekly return on the S&P 500. This week has been topsy-turvy, with Monday registering a small gain of 0.23% and Tuesday off 0.57%, and then yesterday’s hop up. All that said, the broad market index is still ahead 19.3% for 2021.

During this market advance, investors have stuck with stocks as the best possible bet in a time of low interest rates and the anxiety that comes with not wanting to miss out on future gains. That has resulted in two telling acronyms, TINA and FOMO. The first, of course, means “there is no alternative,” in a slighting reference to bonds and other asset classes, and the second stands for “fear of missing out.”

“All I can tell you is you have to be a behavioral scientist because the last leg in asset prices has been really behavioral, has been people believing that if they don’t buy now, they’re missing out on an opportunity,” El-Erian said. As the pandemic got underway early last year, and the market went into free fall, El-Erian advised against buying the dips because he foresaw an even bigger drop ahead.

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Will Last Week’s Selloff Wake Up Investors to the Overvalued Market? El-Erian Asks

As Virus Punishes Stocks, El-Erian Warns: Don’t Buy the Dips

No Need for Taper Trepidation for the Stock Market

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