Madoff Is Wall Street's Hot New Investment

Banks buying up Ponzi claims to cash in later
By Rob Quinn,  Newser Staff
Posted Jun 17, 2011 3:00 AM CDT
Updated Jun 17, 2011 3:19 AM CDT
Bernie Madoff: Laughing on the inside?   (AP Photo/Louis Lanzano, File)
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(Newser) – The wizards of Wall Street have found a way to turn Bernard Madoff into a hot investment. Big banks have been buying up the claims of the victims of Madoff's massive Ponzi scheme, offering scammed investors a fraction of what they are owed in the hopes of making big profits later as a court-appointed trustee chases down the Madoff money and makes settlements, reports the Wall Street Journal.

"It's like a circus out there, a feeding frenzy," says a bankruptcy specialist who helped sell the rights to a major Madoff claim. "There's people buying and paying quite extraordinary prices." In a further twist, some of the biggest players buying up Madoff claims are the same operations that steered investors to him and will have to pay settlements to the trustee. Deep inside the federal Butner Correctional Complex in North Carolina, somebody may be chuckling.

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