Madoff victims

Madoff victims is that only a small fraction of the nearly $65 billion that disappeared has been recovered. While insurance will fill some of that gap, it is clear that many people will not come close to recouping their losses — meaning that whatever one group of investors get will affect how much is available for another group. Ever mindful that the claims process is, in effect, competitive, some groups of investors are jockeying for favorable treatment from the Securities Investor Protection Corporation, the government-chartered insurance agency.

Ms. Chaitman disapproves of the way Irving H. Picard, the court-appointed trustee overseeing the claims process, is calculating investor losses — on the basis of “net equity,” or simply the difference between the total amountinvested in the fund and the total withdrawn before it collapsed.

Ms. Chaitman, who represents more than 100 others in a lawsuit against Mr. Picard, is adamant that they should be reimbursed for the total value of their accounts with Mr. Madoff, even if their withdrawals exceeded their deposits and even though the balances reflected on their statements were based on fake trades. “Fictitious trades are exactly what SIPC was intended to protect against — a dishonest broker who steals the securities or a broker who never buys the securities,” Ms. Chaitman told The Times, even though she saysshe never took money out of her Madoff account and therefore has a claim under Mr. Picard’s rules.