It’s insurance, except premiums weren’t paid?
Nice.
According to that Saturday WCBM financial talk show host that's exactly what it is...
The investors should not have any recourse whatsoever.
OK, I've read too much total crap and junk on too many similar threads from people who have no clue.
SIPC applies to anyone who had a BROKERAGE account with Madoff's SECURITES BROKER entity, NOT his investment advisory/hedge fund entities, and then only to the extent of 100K cash/500K securities. His brokerage entity is a tiny, miniscule fraction of the total money involved.
He had some SECURITY BROKERAGE customers, they're covered by SIPC, because Madoff's SECURITIES BROKERAGE firm paid their SIPC premiums, just like every securities broker does.
His MONEY MANAGEMENT customers, totally different animals, the ones he was conducting the Ponzi scheme with and upon are probably 99% of the total loss, and they're out of luck. They are not covered by SIPC and will get zip from SIPC. They ain't covered for anything, cash, securities or anything else.
Even if they were covered their recovery would be absolute peanuts compared to their total BILLIONS in claims, maybe 1 or 2%.
They're royally screwed, as they should be, having failed to be skeptical of someone who claimed to earn 10% returns regardless of market conditions.