Statement from the office of the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS)

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee & Counsel at Baker Hostetler:

On Friday, February 17, 2012, the SIPA Trustee and his Counsel filed their eighth Fee Application with the United States Bankruptcy Court for the Southern District of New York for their June 1, 2011 to September 30, 2011 work on the global liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS).

• The Application seeks approval of fees representing 130,596 hours of professional and paraprofessional services, which were billed at an average, public interest discounted rate of approximately $367.29 per hour.
• The public interest discount applied represents a reduction of 10 percent from standard rates and it resulted in a total voluntary reduction during the four-month compensation period of $5,329,707.95. In addition to the public interest discount, the Trustee and Baker Hostetler also adjusted fees by writing off an additional $1,252,054.50 for the four-month period as well as expenses in the amount of $501,366.42.
• The fees requested are reasonable based on the customary compensation charged by comparably skilled practitioners in Chapter 11 matters as well as comparable bankruptcy and non-bankruptcy cases in the competitive national legal market.
• After applying the public interest discount, the total fees requested for the period were $47,967,371.55, representing an average of 32,649 hours worked per month on the international investigations, negotiations and litigation resulting from the largest financial fraud in US history.

The professional fees of the SIPA Trustee and his Counsel, as well as the fees of other professionals retained by the SIPA Trustee, are not paid from any funds recovered for the BLMIS Customer Fund. All fees and expenses approved by the Court will be paid by the Securities Investor Protection Corporation (SIPC), a membership organization funded by the securities industry.

As of September 30, 2011, the SIPA Trustee had recovered approximately $8.7 billion (which includes approximately $6.4 billion subject to appeals and other reserves), representing more than 50 percent of the approximately $17.3 billion in principal estimated to have been lost in the Ponzi scheme by customers who filed claims. The $8.7 billion in recoveries equates to more than $263 million recovered per month since the fraud was uncovered in December 2008 and the SIPA Trustee and his Counsel were appointed by the Court to begin the work of the liquidation. These recoveries exceed all prior restitution efforts related to Ponzi schemes both in terms of dollar value and percentage of stolen funds recovered.

As of February 17, 2012, the SIPA Trustee has recovered or entered into agreement to recover more than $9 billion (which includes approximately $6.4 billion subject to appeals and other reserves).

All funds recovered by the SIPA Trustee and his team are recovered wholly for the Customer Fund, for pro rata interim distributions to BLMIS customers with allowed claims. An initial pro rata interim distribution commenced on October 5, 2011, and to date, $325.7 million has been distributed to BLMIS customers, relating to 1,232 accounts. Additionally, as of September 30, 2011, SIPC had committed to advance to the SIPA Trustee approximately $795 million for payment to BLMIS customers with allowed claims. More than $1.1 billion has now been distributed to aid defrauded BLMIS customers.

A Bankruptcy Court hearing for approval of the Fee Application has been scheduled for March 15, 2012.

The Baker Hostetler attorneys who worked on the Fee Application include David Sheehan, Seanna Brown and Jacqlyn Rovine.

The filing is available on the Bankruptcy Court’s website: www.nysb.uscourts.gov; Case No. 08-01789. The Fee Application as well as additional information on recoveries, settlements and filings can be found on the SIPA Trustee’s website: www.madofftrustee.com.

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Statement from the office of the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS)

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee & Counsel at Baker Hostetler:

On Thursday, February 16, 2012, Counsel to the SIPA Trustee, Irving H. Picard, filed on his behalf a Brief for Trustee Appellant Irving H. Picard, as Trustee for the Substantively Consolidated SIPA Liquidation of Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff in the matter of Picard v. UniCredit S.p.A., et al. with the United States Court of Appeals for the Second Circuit.

The filing seeks a reversal of the July 28, 2011 Opinion and Order of the District Court dismissing certain common law claims which was certified as a final judgment pursuant to Fed. R. Civ. P. 54(b).

In this filing, the SIPA Trustee appeals the Rule 54(b) Judgment on the basis that the District Court erred in its July 28 Order holding that the SIPA Trustee lacks standing to assert the common law claims and the contribution claim. The filing states that Securities Investor Protection Act (SIPA), the United States Bankruptcy Code, established precedent, New York state law, and sound public policy grant the SIPA Trustee standing to assert the common law claims and the contribution claim. The filing requests that the United States Court of Appeals for the Second Circuit reverse the District Court’s July 28 Order and remand the matter for further proceedings.

This matter was originally filed in United States Bankruptcy Court on July 14, 2009 and amended on December 5, 2010. On April 25, 2011, the United States District Court for the Southern District of New York withdrew the bankruptcy court reference. On July 28, 2011, the District Court entered an order dismissing the SIPA Trustee’s four common law causes of action and the claim for contribution. The order sent the core bankruptcy causes of action back to Bankruptcy Court, where they remain. On December 12, 2011, the District Court ruled there was no just reason to delay an appeal on the common law causes of action and claim for contribution and certified the July 28, 2011 Order with regard to HSBC as final. On December 13, 2011, Counsel to the SIPA Trustee filed on behalf of the SIPA Trustee a Notice of Appeal.

Baker Hostetler attorneys who worked on this filing include David Sheehan, Oren Warshavsky, Deborah Renner, Lan Hoang, Geraldine Ponto, Geoffrey North, Carrie Longstaff, Tatiana Markel, Jessie Schweller, Michelle Kaplan, and Peter Shapiro.

This filing as well as information on recoveries and other filings can be found on the SIPA Trustee’s website: www.madofftrustee.com.

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Statement from the office of the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS)

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee & Counsel at Baker Hostetler:

On Thursday, February 16, 2012, Counsel to the SIPA Trustee, Irving H. Picard, filed on his behalf a Brief for Trustee Appellant Irving H. Picard, as Trustee for the Substantively Consolidated SIPA Liquidation of Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff in the matter of Picard v. HSBC Bank plc, et al. with the United States Court of Appeals for the Second Circuit.

The filing seeks a reversal of the July 28, 2011 Opinion and Order of the District Court dismissing certain common law claims which was certified as a final judgment pursuant to Fed. R. Civ. P. 54(b).

In this filing, the SIPA Trustee appeals the Rule 54(b) Judgment on the basis that the District Court erred in its July 28 Order holding that the SIPA Trustee lacks standing to assert the common law claims and the contribution claim. The filing states that Securities Investor Protection Act (SIPA), the United States Bankruptcy Code, established precedent, New York state law, and sound public policy grant the SIPA Trustee standing to assert the common law claims and the contribution claim. The filing requests that the United States Court of Appeals for the Second Circuit reverse the District Court’s July 28 Order and remand the matter for further proceedings.

This matter was originally filed in United States Bankruptcy Court on July 14, 2009 and amended on December 5, 2010. On April 25, 2011, the United States District Court for the Southern District of New York withdrew the bankruptcy court reference. On July 28, 2011, the District Court entered an order dismissing the SIPA Trustee’s four common law causes of action and the claim for contribution. The order sent the 19 core bankruptcy causes of action back to Bankruptcy Court, where they remain. On December 12, 2011, the District Court ruled there was no just reason to delay an appeal on the common law causes of action and claim for contribution and certified the July 28, 2011 Order with regard to HSBC as final. On December 13, 2011, Counsel to the SIPA Trustee filed on behalf of the SIPA Trustee a Notice of Appeal.

Baker Hostetler attorneys who worked on this filing include David Sheehan, Oren Warshavsky, Deborah Renner, Lan Hoang, Geraldine Ponto, Geoffrey North, Carrie Longstaff, Tatiana Markel, Jessie Schweller, Michelle Kaplan, and Peter Shapiro.

This filing as well as information on recoveries and other filings can be found on the SIPA Trustee’s website: www.madofftrustee.com.

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Statement from the office of the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS)

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee & Counsel at Baker Hostetler:

On Thursday, February 16, 2012, Counsel to the SIPA Trustee, Irving H. Picard, filed on his behalf a Brief for Trustee Appellant Irving H. Picard, as Trustee for the Substantively Consolidated SIPA Liquidation of Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff in the matter of Picard v. JP Morgan Chase & Co., et al. with the United States Court of Appeals for the Second Circuit.

The filing seeks a reversal of the November 1, 2011 Opinion and Order of the District Court dismissing certain common law claims which was certified as a final judgment pursuant to Fed. R. Civ. P. 54(b).

In this filing, the SIPA Trustee appeals the Rule 54(b) Order of November 30 as well as the District Court’s November 1 Order, on the basis that the District Court erred in holding that the SIPA Trustee lacks standing to assert state law claims against JP Morgan Chase & Co., et al. The filing states that the Securities Investor Protection Act (SIPA), the United States Bankruptcy Code, established precedent, New York law, and sound public policy grant the SIPA Trustee standing to assert state law claims against JP Morgan Chase & Co., et al. The filing requests that the United States Court of Appeals for the Second Circuit reverse the District Court’s November 1 Order and remand the matter for further proceedings.

This matter was originally filed in United States Bankruptcy Court under seal on December 3, 2010, unsealed and then amended on June 24, 2011. On May 1, 2011, the United States District Court for the Southern District of New York withdrew the Bankruptcy Court reference. On November 1, 2011, the District Court entered an order dismissing the state law causes of action asserted by the SIPA Trustee. On November 30, 2011, the District Court ruled that there was no just reason to delay appeal and certified the order dismissing the SIPA Trustee’s state law claims as final. On December 1, 2011, Counsel to the SIPA Trustee filed on behalf of the SIPA Trustee a Notice of Appeal.

Baker Hostetler attorneys who worked on this filing include David Sheehan, Oren Warshavsky, Deborah Renner, Lan Hoang, Thomas Warren, Geraldine Ponto, Geoffrey North, Carrie Longstaff, Tatiana Markel, Jessie Schweller, Michelle Kaplan, Peter Shapiro and Jennifer Vessells.

This filing and its supporting documents, as well as information on recoveries and other filings, can be found on the SIPA Trustee’s website: www.madofftrustee.com.

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Statement from the office of the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee and Counsel at Baker Hostetler:

On Thursday, February 16, 2012, Counsel to SIPA Trustee, Irving H. Picard, filed two briefs on his behalf in the matter of Picard v. Katz, et al. with the United States District Court for the Southern District of New York:

1) Trustee’s Reply Memorandum of Law in Further Support of Trustee’s Motion for Partial Summary Judgment

This reply memorandum of law was filed in further support of the Trustee’s motion for partial summary judgment to avoid and recover as fraudulent transfers to the Two-year New Winner Defendants. Katz Wilpon, et al., by Bernard L. Madoff Investment Securities LLC for which the Defendants failed to provide value –ie fictitious profits- sought in Count One of the Trustee’s Amended Complaint (filed on March 18, 2011.)

2) Trustee’s Reply Memorandum of Law In Support of the Trustee’s Motion to Strike the Expert Reports and Testimony of John Maine

The above filings can be found on the Trustee’s website on the court filing tab:www.madofftrustee.com.

Baker & Hostetler Counsel to the SIPA Trustee who work on Picard v. Saul Katz et al. include:

David Sheehan, Fernando Bohorquez, Regina Griffin, Lauren Resnick, Mark Kornfeld, Timothy Susanin, Tracy Cole, Karin Scholz Jenson, Kathryn Zunno, Jody Schechter, Stacey Bell, Melissa Kosack, Amanda Fein, Brian Song, Marco Molina, Madiha Zuberi and Jacqlyn Rovine.

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Statement from the office of the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS)

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee & Counsel at Baker Hostetler:

On Thursday, February 16, 2012, Counsel to the SIPA Trustee, Irving H. Picard, filed on his behalf a Brief for Trustee Appellant Irving H. Picard, as Trustee for the Substantively Consolidated SIPA Liquidation of Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff in the matter of Picard v. UBS Fund Services (Luxembourg), et al. with the United States Court of Appeals for the Second Circuit.

The filing seeks a reversal of the November 1, 2011 Opinion and Order of the District Court dismissing certain common law claims and a contribution claim which was certified as a final judgment pursuant to Fed. R. Civ. P. 54(b).

In this filing, the SIPA Trustee appeals the Rule 54(b) Judgment on the basis that the District Court erred in its November 1 Order holding that the SIPA Trustee lacks standing to assert the common law claims and the contribution claim. The filing states that Securities Investor Protection Act (SIPA), the United States Bankruptcy Code, established precedent, New York state law, and sound public policy grant the SIPA Trustee standing to assert the common law claims and the contribution claim. The filing requests that the United States Court of Appeals for the Second Circuit reverse the District Court’s November 1 Order, and remand the matter for further proceedings.

This matter was originally filed in United States Bankruptcy Court on November 23, 2010. On May 1, 2011, the United States District Court for the Southern District of New York withdrew the bankruptcy court reference. On November 1, 2011, the District Court entered an order dismissing the SIPA Trustee’s common law causes of action and the claim for contribution. The order sent the bankruptcy causes of action back to Bankruptcy Court, where they remain. On December 5, 2011, the District Court ruled there was no reason to delay an appeal on the common law causes of action and claim for contribution and certified the November 1 Order as final.

Baker Hostetler attorneys who worked on this filing include David Sheehan, Oren Warshavsky, Deborah Renner, Lan Hoang, Geraldine Ponto, Geoffrey North, Carrie Longstaff, Tatiana Markel, Jessie Schweller, Michelle Kaplan, Peter Shapiro and Jennifer Vessells.

This filing as well as information on recoveries and other filings can be found on the SIPA Trustee’s website: www.madofftrustee.com.

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Claim Status as of February 10, 2012

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Statement from the office of the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee & Counsel at Baker Hostetler:

On February 9, 2012, Counsel to SIPA Trustee, Irving H. Picard, filed on his behalf the Trustee’s Memorandum of Law in Opposition to Defendants’ Motion for Summary Judgment with regard to Picard v. Katz, et al. with the United States District Court for the Southern District of New York.

This memorandum of law in opposition to the Defendants’ motion for summary judgment first requests that the Defendants’ motion for summary judgment be denied. It then sets forth the factual issues that would lead a jury to conclude that the Defendants were willfully blind according to the standards set forth by the District Court for this proceeding.

From the Trustee’s Memorandum of Law in Opposition to Defendants’ Motion for Summary Judgment:

After more than fifteen years of investing with BLMIS, the Sterling Partners had by the early 2000s become hooked on Madoff’s guaranteed returns.

The Sterling Partners ignored amassing red flags of fraud concerning their Madoff investments, including:

• that in 2001, financial professionals were publicly expressing skepticism about Madoff’s investment strategy and returns
• that in 2001, they had conversations with another Madoff investor about procuring insurance for their Madoff accounts that would cover fraud including a Ponzi scheme
• warnings that Madoff could be either a fraud or a fiction
• warnings that Madoff could be illegally front-running to supplement his returns
• warnings that Madoff was unique in the industry because he self-cleared, self-executed and self-custodied his transactions
• warnings that Madoff investments were rejected by Merrill Lynch’s due diligence
• warnings that Madoff lacked transparency, and therefore would not pass Sterling Stamos’ due diligence process
• warnings Madoff’s returns were not correlated to the market or to his purported strategy
• knowledge that Madoff’s auditor was a red flag

Every day they remained invested with Madoff, and every time a new warning or red flag of fraud presented itself, they had a decision to make. Their choices were to: 1) divest themselves from their Madoff investments, like their business partners had done; 2) conduct due diligence into the relevant red flags, and accept the risk of financial undoing if the fraud were confirmed; or 3) turn a blind eye, and continue to invest.

History has shown what the Sterling Partners chose every time: not only did they choose to continue to invest; they continued to “double-up,” work the Madoff “vig,” and to increase their leveraged exposure to Madoff.

The Sterling Partners had become utterly dependent on Madoff’s investment returns, which over time had grown to become the very cornerstone of their business plans and personal finances. Moreover, they had become over-dependent upon their BLMIS accounts to secure hundreds of millions of dollars in bank loans—loans as to which, as they admit, could be in default upon just an investigation into BLMIS.

Additional February 9, 2012 filings associated with the Trustee’s Memorandum of Law in Opposition to Defendants’ Motion for Summary Judgment:

1)The Trustee’s Statement of Additional Material Facts That Are Undisputed Or As To Which There Exists     Genuine Issues To Be Tried

2) The Trustee’s Response to Defendants’ Statement of Undisputed Material Facts Pursuant to Local Rule 56.1(b)

Baker & Hostetler Counsel to the SIPA Trustee who work on Picard v. Saul Katz et al. include:

David Sheehan (NY-Partner), Fernando Bohorquez (NY-Partner), Regina Griffin (NY-Partner), Lauren Resnick (NY-Partner), Mark Kornfeld (NY-Partner), Timothy Susanin (NY-Partner), Tracy Cole (NY-Partner), Karin Scholz Jenson (Denver-Partner), Kathryn Zunno (NY-Associate), Jody Schechter (NY-Associate), Stacey Bell (NY-Associate), Melissa Kosack (NY-Associate), Amanda Fein (NY-Associate), Brian Song (NY-Associate), Marco Molina (NY-Associate), Madiha Zuberi (NY-Associate) and Jacqlyn Rovine (NY-Associate).

All of the above filings and their respective supporting documents and exhibits can be found on the Trustee’s website on the court filing tab: www.madofftrustee.com.

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Statement from the office of the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee & Counsel at Baker Hostetler:

On Thursday, February 9, 2012, Counsel to the SIPA Trustee, Irving H. Picard, filed on his behalf the Trustee’s Memorandum of Law in Opposition to the Defendants’ Motion to Strike the Expert Reports and Testimony of Dr. Steve Pomerantz and the Trustee’s Memorandum of Law in Opposition to the Defendants’ Motion to Strike the Expert Report and Testimony of Harrison J. Goldin with regard to Picard v. Katz, et al. with the United States District Court for the Southern District of New York.

Trustee’s Memorandum of Law in Opposition to the Defendants’ Motion to Strike the Expert Reports and Testimony of Dr. Steve Pomerantz:

In response to the Defendants’ Motion to Strike the Expert Reports and Testimony of Dr. Steve Pomerantz and Harrison J. Goldin, dated January 26, 2012, the Trustee has filed a Memorandum of Law in Opposition to the Defendants’ Motion to Strike the Expert Reports and Testimony of Dr. Steve Pomerantz. In the Motion, it is stated that the Trustee offers Dr. Steve Pomerantz as an expert witness to provide a necessary background on the securities and investment management industry. He will also analyze whether, based on a review of the documents, testimony and qualitative and quantitative criteria, there were red flags associated with the Defendants’ investment accounts at BLMIS, and, if so, to determine whether a similarly situated investor would have conducted due diligence and what that would have revealed.

Trustee’s Memorandum of Law in Opposition to the Defendants’ Motion to Strike the Expert Report and Testimony of Harrison J. Goldin:

In response to the Defendant’s Motion to Strike the Export Reports and Testimony of Dr. Steve Pomerantz and Harrison J. Goldin, dated January 26, 2012, the Trustee has filed a Memorandum of Law in Opposition to the Defendants’ Motion to Strike the Expert Report and Testimony of Harrison J. Goldin in which is stated that Mr. Goldin’s Report and expected testimony are both necessary and relevant in aiding the jury with understanding what conduct is expected of a sponsor, administrator, trustee and fiduciary of a retirement plan in accordance with industry standards.

Baker & Hostetler Counsel to the SIPA Trustee who work on Picard v. Saul Katz et al. include:

David Sheehan (NY-Partner), Fernando Bohorquez (NY-Partner), Regina Griffin (NY-Partner), Lauren Resnick (NY-Partner), Mark Kornfeld (NY-Partner), Timothy Susanin (NY-Partner), Tracy Cole (NY-Partner), Karin Scholz Jenson (Denver-Partner), Kathryn Zunno (NY-Associate), Jody Schechter (NY-Associate), Stacey Bell (NY-Associate), Melissa Kosack (NY-Associate), Amanda Fein (NY-Associate), Brian Song (NY-Associate), Marco Molina (NY-Associate), Madiha Zuberi (NY-Associate) and Jacqlyn Rovine (NY-Associate).

All of the above filings and their respective supporting documents and exhibits can be found on the Trustee’s website on the court filing tab: www.madofftrustee.com.

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Claim Status as of February 3, 2012

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