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Bernard Madoff investors may begin recovering funds in a month

The first payouts could occur soon if the cash isn't difficult to trace, the Securities Investor Protection Corp. says.

January 07, 2009|BLOOMBERG NEWS

Investors who lost money in Bernard Madoff's alleged $50-billion fraud might begin recovering some funds as soon as next month, said Stephen Harbeck, head of Securities Investor Protection Corp.

"You're talking about unscrambling an egg," he said Tuesday. First payouts from the investor protection fund could occur in "a month or two" if the cash isn't difficult to trace, Harbeck said. Other customers will have to wait for months, he said.

The investor fund, a Washington group funded by member broker-dealers, tries to recover funds in missing-asset cases. The organization's funds cover securities and cash claims of as much as $500,000 per customer, including as much as $100,000 in cash.

The Madoff case "is of a completely different order of magnitude" from anything the investor fund, set up to protect small investors, has seen before, Harbeck said.

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