Wall Street Speculators Hope to Profit on Madoff Victims

They're offering cash upfront, for reduced amounts, to take over claims
By John Johnson,  Newser Staff
Posted Dec 14, 2010 12:10 PM CST
A 2009 file photo of Bernie Madoff.   (AP Photo/David Karp, file)

(Newser) – Bernie Madoff made a fortune off his victims, and now speculators in the field known as distressed securities hope to do the same. As the New York Times explains: These speculators are contacting those who lost money and offering a deal: We'll give you cash immediately and take over your claim as it winds through bankruptcy court. The Madoff victims would get only 30 cents on the dollar at most, but they wouldn't have to wait years for the cases to be settled, possibly at a reduced amount anyway.

"Virtually every sophisticated distressed investor is looking at the Madoff situation,” says one lawyer. And for good reason, notes one Madoff victim: "People need to understand that people who are offering 30 cents are savvy professionals who fully expect to get 50 to 60 cents when the claims are finally paid. They’re not offering 30 cents because they expect to get 35.”

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