Trustee Irving Picard announced that more than $534 million has been paid to 1,368 victims of Bernard Madoff through the national fund that insures against failed brokerage firms.
Picard said he has so far identified allowable claims totaling $4.43 billion and is still processing thousands of claims filed by alleged victims.
To date, he has identified 2,335 investment accounts with net losses of $21.2 billion with Madoff.
The $534 million paid out so far to victims is more than the insurance fund, the Securities Investor Protection Corp., has paid out in all of its 321 prior liquidations combined.
The fund, established by Congress in 1970, allows individuals to receive a maximum of $500,000.
The House health care bill proposed late this week would give the Federal Trade Commission new powers to monitor health insurers for fraud.
President Barack Obama maintained his position recently in his Weekly Web Address that insurance company fraud remains the biggest obstacle in providing adequate, competitive health care to most Americans who need it.
The insurance companies and those acting as mouthpieces for the industry have strongly rebuked Obama’s assertions despite countless lawsuits and a track record of fraud, especially recently.
On this blog this week we noted the creation of a non-profit out-of-network compensation database in New York. This database is being established by New York Attorney General Andrew Cuomo and is funded by settlement fees from some of the nation’s largest insurers like Aetna and UnitedHealth Group.
Cuomo accused the insurers of short-changing consumers on out-of-network compensations.
The Federal Trade Commission would now be able to monitor such instances of fraud among insurers across the country, a role it was barred from for nearly three decades.
Of course, for these powers to actually be enacted, the Bill must pass the House, Senate and Obama, with the first two presenting the biggest trouble.
A judge has refused to dismiss a multibillion dollar securities fraud case against former officers, directors, accountants and underwriters of Washington Mutual Bank.
Washington Mutual Bank collapsed last year in the biggest bank failure in U.S. history.
The 267-page lawsuit focuses mainly on practices involving home loans, the bank’s principal business, and on securities issued by WaMu and its subsidiaries.
A trial is set for May 2, 2011.
The attorneys general of 40 states have asked the FTC to tighten regulation of companies offering debt relief services to consumers.
The FTC is currently reviewing a new rule proposal to amend the current Telemarketing Sales Rule.
The new rule proposes prohibiting debt relief companies from charging fees until they have performed services as well as prohibiting misleading statements concerning fees, success rates, and the impact the services will have on a consumer’s credit history.
Last year, consumer debt-related issues surged to the top category of complaints filed, including credit card debt, abusive collections and deceptive debt settlement practices.
Aiming to curb the fraud that riddled the health insurance industry in his state, New York Attorney General Andrew Cuomo this week unveiled a non-profit database for out-of-network insurance payments.
New York harbored United Health Group and its corrupt database for consumer reimbursements of out-of-network health care services.
The Ingenix database was used as a model for health insurance systems across the industry and country.
The AG said this fraudulent, insurance-friendly database, and others like it, cost insured Americans hundreds of millions of dollars.
His new project is known as Fair Health Inc. It aims to be an unbiased database which lets consumers and insurers alike, aware of the suggested reimbursement rates for services not covered.
A companion Web site will allow consumers to compare prices before choosing a doctor.
Cuomo received $100 million from UnitedHealth Group, Aetna and WellPoint Inc. when he pursued criminal charges based on the fraudulent database.
He said the Ingenix was setting reimbursement rates much lower than the standard 80 percent compensation for these services.
A judge overseeing the fraud and conspiracy trial of a former Bear Stearns hedge fund manager has dismissed an email key to the prosecution.
The attorney for 48-year-old Matthew Tannin argued that the emails, which showed the defendant admitting he knew the hedge funds were on the verge of collapse, were obtained illegally, according to a New York Post report.
Investors are believed to have lost $1.6 billion through Tannin, accused of lying to investors about the health of the funds he managed.
In his emails which jurors won’t see, Tannin said, “Spreads are tight and credit is only deteriorating.
“I was worried that this would all end badly and that I would have to look for work. We could blow up,” he wrote.
A House committee has subpoenaed documents related to Countrywide Financial Corp’s VIP program.
The program offered preferential treatment to well-connected or powerful mortgage customers, including government officials.
The committee is also demaning information from Wells Fargo & Co, Bank of America Corp, JPMorgan Chase & Co, Citigroup Inc, US Bancorp and GMAC’s Residential Capital.
The probe will try to determine whether the companies “employed deceptive and predatory lending practices, or improper tactics to thwart regulation.”
Disney has agreed to refund money to parents who purchased its Baby Einstein video, admitting it made false claims about the product.
Anyone who purchased a Baby Einstein video from June 5, 2004, until September 4, 2009, is eligible for a full refund of the purchase price of the DVD.
The children’s advocate Campaign for a Commercial-Free Childhood claimed the video made false claims – that watching them made children smarter.
In fact, the advocate argued that any television viewing for a small child is actually harmful to their health. They cite a study from the American Academy of Pediatricians.
Baby Einstein, a division of Disney, agreed to stop marketing the videos as they had, and removed testimonials from parents about the products on its Web site.
CCFC is upset, despite its apparent victory, that the Federal Trade Commission ignored the complaint and said it would not file any charges against Disney for the false advertising.
Bernard Madoff friend Jeffry Picower, 67, was found Sunday at the bottom of the pool at their oceanside mansion and pronounced dead.
Picower was accused of profiting more than $7 billion from Madoff’s investment schemes, which trustee Irving Picard was demanding be returned.
Picower and his wife started the Picower Foundation in 1989, which has given millions to MIT, Human Rights First and the New York Public Library. It also funded diabetes research at Harvard Medical School.
After the Madoff scandal broke in December, the Picower foundation said it would have to cease grant-making and would be forced to close.
Choice Point, a data broker, has agreed to pay consumers a total of $275,000 to compensate for a 2008 data breach of its system that exposed the identities of more than 13,000 people.
This data breach showed that ChoicePoint failed to implement better security measures following a similar incident in 2005 which exposed more than 160,000 records it keeps. The company agreed in 2007 to pay $500,000 to 44 states to settle those charges.
The Federal Trade Commission said ChoicePoint is developing bad business practices and ignored a court order to implement a security system on its databases which protect the personal information they store.
Breaches of ChoicePoint’s systems exposes thousands of Social Security Numbers and credit scores.
The FTC said ChoicePoint turned off a key security tool which monitors the access to its databases. This allowed an unauthorized person to conduct countless searches of the system for up to 30 days, according to reports.