"Purported increases in the value of customers' accounts, moreover, were entirely fictitious," validating the lower court rulings, it said.
Picard's Formula
Picard's formula for compensating victims is to figure their loss of principal, then allot them a share of the money he says he has raised by suing or settling with investors who allegedly knew of the fraud. Investors with net gains--who took out more money than they put in--have to wait until net losers get paid in full.
Most of the $9 billion that Picard has won in settlements, including $5 billion from Jeffry Picower's estate, has been unavailable for disbursement because of court challenges. He has however set aside $2.3 billion for customers, which is now mostly available.
Amanda Remus, a Picard spokeswoman, didn't immediately reply to an e-mail.
The trustee, who filed more than 1,000 lawsuits claiming $100 billion, said last year he hoped to raise enough money to pay all investors back in full, including those with false profits on the account statements. Since then, federal judges led by U.S. District Judge Jed Rakoff in New York have dismissed about $90 billion of Picard's claims.
Reflecting poor payment prospects, larger claims on the Madoff brokerage's estate have fallen from about 70 cents on the dollar last year, to about 58 to 62 cents, said Sarachek at CRT Capital Group.
Picard and his law firm have charged $273 million for their Madoff work so far. Madoff is in jail, serving a 150-year sentence for fraud.
Velvel's appeal is Velvel v. Picard, 11-00986, U.S. Supreme Court (Washington). The main case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 08-01789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).