Customer Outcomes in the Madoff Liquidation Proceeding (GAO Report)

This GAO report discusses (1) the extent to which account activity varied by type of Madoff customer, (2) the nature of claims filed, and rejected or approved, with the Trustee for reimbursement of losses, (3) litigation and settlement activity the Trustee has pursued in seeking to recover assets for distribution to customers, and (4) the effect of the fraud on customers' federal income tax liabilities.

GAO reviewed transaction and claims data from the Trustee, lawsuits filed by the Trustee, IRS rules and guidance, and interviewed the Trustee, private sector tax experts, and officials from IRS, SIPC, and the Securities and Exchange Commission.

Lofchie Comment: Provides a lot of background on the progress of the Madoff case. The legal analysis is probably less interesting from the standpoint of broker-dealer regulation than it is from the standpoint of the obligations of persons doing business with Madoff.

View report in full here (links externally to GAO website).