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#Madoff on Friday

To: Congressman Gary Ackerman
From: Irv Picard

Congressman: I won't bother saying that I'm getting more than a bit frustrated by your ongoing effort to vilify me in the media; after all, castigating people whenever there's a microphone in front of your face seems to be what you, and every other politician, do best.

That said, your comparing a statement of account provided by an FDIC regulated bank to a statement of account provided by an SEC regulated brokerage firm suggests that you might want to have lunch with Ben Bernanke, or if he's not available, with Tim Geithner.Or make a call over to Liz Warren.

The Madoff brokerage account statements were phony, even if the paper was high quality. SIPC's only obligation is to pay out up to $500,000 in the event a broker has defrauded a customer. After that, SIPC's mandate is to make a best effort to recover funds from those that have benefited from the fraudulent activity, and thereafter to make a best effort, on a pro-rata basis, to return principal investment to the net losers. If we were supposed to return the fictitious profits that accrued, well, it just wouldn't make any sense.

Why don't you introduce legislation that would have Uncle Sam make good on the balances? After all, the SEC is a government agency, and if they weren't asleep at the wheel, none of this would have happened!

If you continue to make misleading statements, it will only hamper our efforts. As far as our calculation of net in vs. net out for those that simply made transfers between accounts at Madoff: we maintain our position that a transfer was a withdrawal, and not entitled to reimbursement under the $500k cap. Yes, we understand that this particular transfers did not involve withdrawing money from Madoff's firm, and they were nothing more than internal bookkeeping journal entries.

Not my problem. If your constituents have a problem with that, they're entitled to do what everyone else in this country is entitled to do: Sue!!

Irv

From: M. Shapiro
To: E.Swanson
re: dodfrnk
Got your txt msg. Yes..am very disappointed that cngrs clipped out the secrecy provision in dodfrnk. But, no worries..shredding machines have taken care of the issue that you are concerned about. MS

btw: tell your Uncle Bernie that I don't have jurisdiction over F.Norris at NY Times. If Norris's column in today's NYT re: flash crash plagiarized Bernie's blog posting from Tuesday, Bernie needs to take it up with him directly.

From: Bernie
To: Brother Pete
Mazel on your deciding to use that law school degree and go into the legal profession! Who knew that you'd so easily pass the Bar exam down in Florida? I DID!! And, don't worry about getting a job...nobody wants to hire a young lawyer, they want one with gray hair that at least looks like they've got experience!
Your loving brother.
BTW--I'm sorry about the 1 pt thing.

BLM

Full post as published by Bernard Madoff on September 25, 2010 (boomark / email).