Madoff Victims Sue SIPC Over 'Net Equity' Payments

Law360, New York (February 25, 2010, 6:37 PM EST) -- Three victims of Bernard L. Madoff’s epic Ponzi scheme have launched a proposed class action claiming the leadership of the Securities Investor Protection Corp. has perpetrated its own investment fraud by denying them the “insurance” the agency promised.

In a complaint filed Wednesday in the U.S. District Court for the District of New Jersey, the plaintiffs challenged the method SIPC President Stephen Harbeck and the agency’s directors are using to compensate roughly 4,000 investors for their lost funds.

The Madoff investors say the value of their...
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