Fraud Professionals are the Real Winners in Madoff Case

The fees paid to fraud professionals such as attorneys, consultants and accountants to clean up the mess that Bernie Madoff's famous Ponzi scheme left is projected to reach over $1 billion! According to the Washington Post the fees paid to such professionals last year were almost $300 million and an additional $800 million is projected. Almost half of the fees went to the law firm of the trustee, Irving Picard. These fees are being criticized by those overseeing the case as described in the following quote from the Washington Post:

(A) federal watchdog warned Thursday that neither the courts nor officials at the Securities and Exchange Commission effectively oversee the fees and expenses paid to outside contractors and urged regulators to watch more closely to make sure the payments are appropriate.  

When brokerage firms collapse, the SIPC intercedes to recover money for the clients of the firm and can enlist private experts to help in the task. In the Madoff matter, the leader of the private contractors administering the case is Irving H. Picard, who was named as trustee by the SIPC without competitive bidding and then approved by a court. 

Read the article in its entirety on Mark and Aaron Zimbelman's blog, FraudBytes.

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