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Investors who lost money in the Bernie Madoff investment fraud were shocked by what they heard at the very first investors' meeting last week – there is evidence to suggest that Madoff bought no securities and made up monthly statements sent to customers.

At least 300 investors with their investment fraud lawyers gathered in Manhattan at a meeting that was meant to calm panic-stricken investors, but ended up doing just the opposite. According to Irving Picard, who was appointed as a trustee by the court and given the responsibility of overseeing the sale of Madoff’s assets in order to pay his victims, there is evidence that the shamed money manager bought no securities for his customers over a period of 13 years, at least. In short, he only used investor money to pay off other investors in a classic Ponzi scheme. Needless to say, this revelation has only added to investors' fears. The meeting was attended by several investors, many of them senior citizens who have been milked off their entire life savings to the tune of millions of dollars each. Several of them have been forced to sell their homes and go back to work in an effort to financially cope with their losses.

There was at least one ray of hope for frazzled Madoff investors. Picard confirmed that he was able to generate funds, amounting to $650 million from Madoff asset sales. He expects to recover $950 million in all to help compensate customers who submit claims before the July 2nd deadline. These claims are in addition to the $500,000 that each investor is eligible for from the Securities Investor Protection Corporation.

For many investors, another concern has raised its head; investors who have received significant returns from their Madoff account over the years may have to return it in what is known as a “clawback.” These investors may find that the returns they enjoyed for so many years are not really theirs, because the accounting statements were bogus and no investments were actually made in their name. Simply put, these investors did not receive “returns”, they only received other investors' money. It is a bitter pill to swallow and thousands of investors will be looking at more painful days in the  months ahead. Nearly 2350 investors have filed claims to recover funds as of now. Across the spectrum of victims, which includes philanthropists, entertainers and retirees, one feeling runs high – they have been let down not only by Madoff, but by the Securities and Exchange Commission which failed to act on whistleblower efforts to bring the ongoing fraud to their attention.

Investment Fraud Attorneys

The process of recovering funds from an investment fraud can be daunting. It takes time, effort and expertise that stressed securities fraud victims don't typically have. Our team of securities attorneys has the expertise and experience it takes to get you the compensation you deserve.

If you have lost money in the Madoff Ponzi scheme, contact an experienced securities attorney at Arnold & Itkin LLP for a free consultation.