Individuals who claim they participated in ERISA-regulated plans that had accounts with Bernard L. Madoff Investment Securities are not “customers” within the meaning of the Securities Investor Protection Act and cannot receive a payment under the act, Southern District Judge Denise Cote has ruled.
Moreover, Cote (See Profile) held on July 26 that ERISA-regulated plans or IRAs that invested in hedge funds or trusts that had accounts with the Madoff firm also are not customers and are not entitled to advances of up to $500,000 from the Securities Investor Protection Corporation (SIPC) while awaiting their share of recovery of “customer property” from failed brokerage firms.
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