Could You Lose Money in the Madoff Scandal?

Two big pension funds have been caught up in the scandal involving Bernard Madoff, the money manager confessed to bilking investors out of more than $50 billion in an elaborate Ponzi scheme. Others who have lost a great deal of money include wealthy individuals, charities, banks, investment firms, and foreign companies.

Among pension funds that have said they lost money in the scam are the Town of Fairfield Employees Pension Fund, which covers about 800 police, firefighters, and other employees of Fairfield, Conn. “Right now we are assuming the worst case, which is we could have lost up to $40 million out of the approximately $290 million that we felt we had last month,” Kenneth Flatto, Fairfield’s First Selectman, told Reuters.

The Massachusetts State Pension Fund said it lost $12 million in the scheme. Other high profile individuals and businesses that lost money include Jeffrey Katzenberg, Steven Spielberg, HSBC, and Royal Bank of Scotland.

While many Americans may think they are immune to the scandal because they aren’t wealthy and didn’t invest money directly with Madoff’s firm, Bernard L. Madoff Investment Securities, that may not necessarily be the case. Officials investigating the fraud said it may take months to sort through the mess to determine exactly who had money invested indirectly with Madoff through private money managers or pension funds.

If you think you may have lost investments in the Ponzi scheme, you can call the Federal Bureau of Investigation (FBI) hotline at 212-384-2359 for more information. The Securities Investor Protection Corporation (SIPC), which is liquidating assets of Madoff’s firm, insures investments for up to $500,000. The SIPC may be able to recover some money for investors, but due to the huge amount of losses in the case it’s possible that much of the money won’t be recovered.

This entry was posted on Friday, December 19th, 2008 at 12:49 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.