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Fourth pro rata interim distribution of recovered funds to Madoff claimants begins

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The fourth pro rata interim distribution of recoveries from the Customer Fund to eligible Bernard L Madoff Investment Securities (BLMIS) customers began on 5 May.

In the fourth interim distribution, the SIPA Trustee is distributing approximately USD351.6 million on a pro rata basis to BLMIS account holders with allowed claims, bringing the amount distributed to eligible claimants to almost USD6 billion.
 
This includes approximately USD812.2 million in committed advances from the Securities Investor Protection Corporation (SIPC).
 
“Today’s distribution is another important step forward for our recovery efforts,” says Irving H Picard, SIPA Trustee for the liquidation of BLMIS. “We are already looking ahead to additional, significant recoveries and distributions later this year. While more than 1,100 victims have already recovered the full principal they lost in the fraud, we are working to restore all of the stolen funds to all of the approved claimants as quickly as possible.”
 
“SIPC is pleased with the progress made in the BLMIS liquidation under SIPA,” says SIPC president and CEO Stephen P Harbeck. “SIPC has worked closely with Mr. Picard and his legal team, toward the achievement of important milestones like the one being announced today. SIPC’s support of the recovery initiative will continue, as the Trustee and his team pursue our shared goal of a 100 percent return of property to Madoff customers.”
 
The fourth distribution will be paid on claims relating to 1,081 BLMIS accounts, to record holders of allowed claims as of 17 April 2014. Allowed claims will receive 3.18 per cent of the allowed claim amount of each individual account, unless the claim is fully satisfied.
 
The average payment for an allowed claim issued in the fourth distribution will total approximately USD325,000. The smallest payment totals approximately USD500.00 and the largest payment is approximately USD77.8 million.
 
Funds from the USD325 million settlement with JPMorgan Chase, other smaller settlements and recoveries that have been released from reserves through the end of March 2014 comprise the bulk of the funds to be distributed in the fourth distribution.
 
Currently, the SIPA Trustee has allowed 2,518 claims related to 2,190 BLMIS accounts. Of these accounts, 1,129 accounts will be fully satisfied following the fourth interim distribution. All allowed claims totalling USD925,000 or less will be fully satisfied after the distribution.
 
To date, the SIPA Trustee has recovered or reached agreements to recover approximately USD9.8 billion since his appointment in December 2008. These recoveries exceed similar efforts related to prior Ponzi scheme recoveries, in terms of dollar value and percentage of stolen funds recovered. Ultimately, 100 per cent of the SIPA Trustee’s recoveries will be allocated to the Customer Fund for distribution to BLMIS customers with allowed claims.

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