The court-appointed trustee overseeing the liquidation of Bernie Madoff’s firm has earned $1.5 billion in fees since his appointment 15 years ago, a Reuters analysis found.
Irving Picard of the law firm Baker & Hostetler announced Friday that he was set to distribute another $45 million to investors Madoff swindled, bringing the total amount of returned funds to $14.6 billion. Investors are estimated to have lost $17.5 billion in the fraud.
About half of the funds recovered came from a 2010 settlement with the estate of longtime Madoff associate Jeremy Picower.
Picard said in a statement that his success can be attributed in part to past wins that have “encouraged other defendants to negotiate settlements to avoid the expense of litigation, which in turn permits us to return more Madoff stolen funds to their rightful owners.”
The $1.5 billion in fees account for 17% of Baker & Hostetler’s revenues since Picard was appointed trustee, according to the Reuters analysis, which it said counts as “an unusually large proportion from one case for a firm its size.”
None of the firm’s revenues from the case are paid out of recovered funds. Instead, they are paid by the Securities Investor Protection Corporation, a nonprofit that Congress created in 1970 to help investors recover funds from failed brokerage firms.
The SIPC’s fund is in turn funded by a small fee charged to broker-dealers proportional to their operating revenue and by interest earned on government securities held in the fund.
Madoff, a financier who ran what is said to be the largest Ponzi scheme in history, was sentenced to 150 years in prison in 2009, He died in 2021.
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