The Ponzi scheme perpetrated by Bernard L. Madoff is the biggest fraud of all time. The job undertaken by the court-appointed SIPA Trustee in the substantively consolidated liquidation proceeding of Bernard L. Madoff Investment Securities LLC (“BLMIS”), under the Securities Investor Protection Act (“SIPA”), is unprecedented.
Duties of the Trustee
The SIPA Trustee’s principal duty is to return recovered property to the customers of BLMIS. SIPA lays out a clear process for the identification of customers and for the return of recovered assets that requires rules of assessment and equal treatment for all claimants. For more information, please refer to the Claims section of this website.
The SIPA Trustee must marshal assets – which includes identifying and collecting assets and putting them in proper order as designated by law – to maximize the amount available for distribution as customer property and for the benefit of general creditors. The SIPA Trustee regularly reports to the United States Bankruptcy Court for the Southern District of New York on his progress in recoveries, resolution of claims and other matters. Please refer to the Interim Reports section of this website for more information.
The SIPA Trustee has a duty to conduct an investigation concerning the acts, conduct, property, liabilities and financial condition of BLMIS, the operation of its business, and all other matters relevant to the liquidation proceeding. The SIPA Trustee requests voluntary cooperation whenever possible, but also has subpoena power to use at his discretion.
A final report will provide a public and transparent record of the proceeding that will contain results, a final accounting and professional recommendations.
On December 15, 2008, the United States District Court for the Southern District of New York entered an Order commencing the liquidation of Bernard L. Madoff Investment Securities LLC and granting the application of the Securities Investor Protection Corporation for issuance of a protective decree adjudicating that the customers of BLMIS were in need of the protection afforded by SIPA. As part of that order, Irving H. Picard was appointed the SIPA Trustee for the liquidation proceeding of BLMIS and Baker Hostetler was appointed counsel to the SIPA Trustee. The case was removed to the United States Bankruptcy Court for the Southern District of New York.
On June 9, 2009, the substantive consolidation of the Estate of Bernard L. Madoff into the SIPA Proceeding of Bernard L. Madoff Investment Securities LLC was ordered.
The SIPA Trustee has retained various domestic and international experts and professionals to perform specific functions and assist in the orderly liquidation of the BLMIS estate in the effort to satisfy customer and other claims.
Generally, in a SIPA liquidation, the SIPA Trustee assumes the premises of the broker-dealer. In the case of the BLMIS liquidation, the SIPA Trustee has been operating from the New York offices of Baker Hostetler since July of 2009.
SIPA Proceeding Court Orders
June 09, 2009ORDER: CIV. 08-10791
Order of substantive consolidation of the Estate of Bernard L. Madoff into the SIPA Liquidation of Bernard L. Madoff Investment Securities LLC.
February 04, 2009ORDER: 08-01789
Order of disinterestedness of Trustee and Counsel to Trustee.
December 23, 2008ORDER: 08-01789
Approving form and manner of publication and mailing of notices, specifying procedures for filing, determination, and adjudication of claims; and providing other relief
December 22, 2008ORDER: 08-01789 - CFB 8954507
Trustees bond.
December 15, 2008ORDER: CIV. 08-10791
Order granting the application of the Securities Investor Protection Corporation (“SIPC”), and appointed Irving H. Picard Trustee for the liquidation of Bernard L, Madoff Investment Securities LLC (“BLMIS”) pursuant to the Securities Investor Protection Act (”SIPA”).