Madoff Investor Group Appeals for SIPC Recoveries

A group of 700 investors is arguing that Bernard Madoff's customers should be entitled to recoveries from the Securities Investor Protection Corp. even if they collected more from the fraudulent schemes than they invested.

The investors' lawyer, Helen Chaitman, is arguing that the investors had no knowledge of the fraud, and asking that a bankruptcy judge's decision that bars them from collecting SIPC money be reversed, Bloomberg News reported.

"Appellants are, typically, people in their 70s, 80s or 90s, whose assets, other than their homes, were invested in BLMIS," Chaitman wrote in a filing on Monday. "They live in constant fear that the trustee will sue them for the amount they withdrew from BLMIS in excess of their investments."

The investors want SIPC trustee Irving Picard to review claims based on account statements from the end of 2008. These statements include fake profit from the fraud. Picard has argued that method would allow Madoff to decide who recovers what, and include profit from trades that never occurred.