THE WALL STREET JOURNAL
Post Madoff, a Support Network
Victims of Alleged Ponzi Scheme Find Comfort Through Shared Hardship
By Dionne Searcey
February 1, 2009
Investors who say they were burned by Bernard Madoff are turning to the only people who seem to understand their predicament: each other.
At a time when Congress is helping a range of industries, there's little momentum for legislative financial relief for Mr. Madoff's victims, and some have found surprising hostility to their predicament.
In the wake of the scandal, victims have united. Internet forums and phone-number exchanges have sprouted up, allowing individual investors to share sad stories, pass on tips and vent frustrations.
"My wife and I lost $1.1 million, which was the bulk of our life savings" read one email from a Madoff investor to a forum started by Ronnie Sue Ambrosino, herself a Madoff victim. "I know you are as frustrated as I am that our government has been silent to date on providing any assistance or advice to victims."
Mr. Madoff was arrested in December after allegedly saying he was operating a giant Ponzi scheme that may be responsible for many billion of dollars in investor losses, according to federal investigation.
After weeks of trading stories about selling homes, returning to work after retirement and coping with depression, many investors are turning to recouping their losses.
It's a frustrating chore, they say, complicated by doubts about whether Mr. Madoff has sample assets to compensate the investors, who may number into the thousands. Ms. Ambrosino of Delray Beach, Fla., who has emerged to speak for many individual investors, has written to President Barack Obama and enlisted other victims in her letter-writing campaign to members of Congress. She is trying to organize a Madoff investors' march on Washington.
The response so far: form letters from politicians telling her how much mail they receive and how they'll respond in due time.
An investor recently wrote on one Web forum, the Madoff Survivors Group, that she was getting discouraged and physically ill from the stress. Ms. Ambrosino replied: "Hey you. DON'T GIVE UP. I know we'll have days when it seems as if we can't get out of bed, days we'll be mad as hell, days we'll feel stupid…Don't waste your energy on getting upset…Save that strength for the fight."
Some also have turned to the Securities Investor Protection Corp., a securities-industry group formed to help customers of failed brokerages, which can offer up to $500,000 per customer.
However, the victims' chief gripe on the Internet forums is that SIPC wants documentation of investments made with Mr. Madoff. Some of them, investors for decades, have saved only recent financial records. SIPC chief Stephen Harbeck said he is asking for as much documentation as possible to resolve claims in a timely fashion.
At a recent meeting in a Manhattan hotel ballroom, about 120 investors - including 700 who phoned in to the meeting - listened to detailed advice on SIPC claims and tax issues.
Later in the meeting, hosted by the Long Island law firm Meltzer Lippe Goldstein & Breitstone, U.S. Rep. Steve Israel phoned in and dampened optimism for financial help from Capitol Hill, which he declared was suffering from bailout fatigue, though he said he sympathizes with them and would help on regulatory reform.
Elsewhere, representatives of accounting firm Holtz Rubenstein Reminick discussed a homeowners' insurance clause that could recover up to $100,000.
Eyes in the room brightened until the scenario was explained: The investors would have had to have paid an additional fee above the basic policy premium for a kind of high-end homeowner insurance policy that was available only as of last April.
