As of February 15, 2012 and in the 38 months since his appointment, the SIPA Trustee has recovered or entered into agreements to recover more than $9 billion, representing approximately 52 percent of the approximately $17.3 billion in principal estimated to have been lost in the Ponzi scheme by BLMIS customers who filed claims. These recoveries exceed prior restitution efforts related to Ponzi schemes both in terms of dollar value and percentage of stolen funds recovered.

Significant Recoveries to Date

IRS
On December 21, 2011, a $326 million settlement with the United States of America, on behalf of the Internal Revenue Service, was approved by the United States Bankruptcy Court for the Southern District of New York. The SIPA Trustee determined that BLMIS falsely debited the accounts of 145 foreign accountholders for alleged income tax withholding and paid to the IRS such withheld amounts related to alleged dividends. However, because no securities were purchased on which the alleged dividends were paid, no taxes should have been withheld.

Mount Capital Fund
On October 4, 2011, the United States Bankruptcy Court for the Southern District of New York approved a settlement with Mount Capital Fund, a BLMIS Feeder Fund, which is in liquidation in the British Virgin Islands, which returned $43.5 million to the Customer Fund.

Tremont Group
On July 28, 2011, the SIPA Trustee announced a settlement with Tremont Group Holdings Inc. and related entities under the terms of which the Defendants will deliver cash payments into escrow totaling more than $1 billion, which will ultimately be placed into the Customer Fund and distributed, pro rata, to BLMIS customers with allowed claims. On September 22, 2011, the agreement was approved by the United States Bankruptcy Court for the Southern District of New York, but the settlement is currently under appeal.

Greenwich Funds
On May 18, 2011, a settlement agreement was announced with Greenwich Sentry L.P. and Greenwich Sentry Partners, L.P. (combined, the “Greenwich Funds”), domestic BLMIS feeder funds operated by the Fairfield Greenwich Group (“FGG”) that were 100 percent invested in BLMIS. Terms of the settlement, which was structured very similarly to the settlement with the Fairfield Funds, included a reduction in the Greenwich Fund customer claims which will ultimately benefit BLMIS customers with approved claims. Under the agreement, the Greenwich Funds also agreed to assign all of their claims against FGG management companies, officers and partners to the Trustee and to the entry of judgment for the full amount of the Trustee’s claims, approximately $212 million. The settlement was approved on June 21, 2011 by the United States Bankruptcy Court for the Southern District of New York.

Fairfield Funds
On May 9, 2011, a settlement agreement was announced with the Joint Liquidators of Fairfield Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda Limited (collectively, the “Fairfield Funds”). Terms of the settlement include an immediate and permanent reduction – of nearly $1 billion – in the total amount of claims against the BLMIS Customer Fund by the Fairfield Funds, which would effectively increase future payments to customers with allowed claims. In addition, the settlement agreement aligned the interests of the SIPA Trustee and his counsel with the Joint Liquidators of Fairfield Sentry, strengthening both parties’ abilities to pursue and recover billions of dollars in additional claims against the owners and management of the Fairfield Funds, as well as hundreds of subsequent transferees of stolen customer property. The United States Bankruptcy Court for the Southern District of New York approved this settlement agreement on June 7, 2011.

Hadassah
On March 10, 2011, the United States Bankruptcy Court for the Southern District of New York approved a settlement between the SIPA Trustee and Hadassah in the amount of $45 million.

Union Bancaire Privée
On January 6, 2011, the United States Bankruptcy Court for the Southern District of New York approved a pre-litigation settlement between the SIPA Trustee and Union Bancaire Privée that resulted in the recovery of $470 million.

Carl J. Shapiro, et al.
On December 21, 2010, the United States Bankruptcy Court for the Southern District of New York approved a pre-litigation settlement between the SIPA Trustee and Carl J. Shapiro, Robert Jaffe and related entities in the amount of $550 million. As part of the agreement, the Shapiros also forfeited $75 million to the U.S. government.

Estate of Jeffry Picower
On December 17, 2010, the SIPA Trustee and the U.S. Government announced a groundbreaking $7.2 billion recovery agreement with the estate of Jeffry Picower; $5 billion of the settlement to go to the SIPA Trustee for equitable distribution to BLMIS customers with allowed claims and $2.2 billion forfeited to the U.S. government.

On January 13, 2011, the United States Bankruptcy Court for the Southern District of New York approved this settlement, but the settlement is currently under appeal by third parties. The government forfeiture order also is being appealed.

Norman F. Levy, et al.
On February 18, 2010, the United States Bankruptcy Court for the Southern District of New York approved a pre-litigation settlement between the SIPA Trustee and the estate of Norman F. Levy. This settlement resulted in the return of $220 million (the “Norman Levy Settlement”). Certain customers moved to set aside the Court’s Order approving the Norman Levy settlement. The Bankruptcy Court denied the motion, and the claimants filed an appeal in United States District Court on April 11, 2011. On February 16, 2012, the District Court upheld the Bankruptcy Court’s earlier ruling approving the SIPA Trustee's settlement with the Levy family.

Optimal
On June 16, 2009, the United States Bankruptcy Court for the Southern District of New York approved a pre-litigation settlement between the SIPA Trustee and Optimal Strategic U.S. Equity Ltd. and Optimal Arbitrage Ltd. This settlement resulted in the recovery of more than $235 million.


Total Recoveries by Interim Report Periods
Amounts shown do not include Court-approved settlements under appeal or not yet collected