Posted Apr 01, 2011 12:24 pm CDT
Lawyers and other professionals hired to clean up the aftermath of Bernard Madoff’s Ponzi scheme are expected to cost more than $1 billion.
As of the end of last year, professionals hired in the Madoff cleanup had earned $288 million, the Washington Post reports. A report recently submitted to Congress said the costs are expected to grow by $1.1 billion.
The inspector general of the Securities and Exchange Commission, H. David Kotz, is warning that fees in the Madoff and Lehman Brothers cases could deplete funds of the group paying the tab, the Securities Investor Protection Corp., according to Reuters and Bloomberg. He is urging regulators to keep a closer watch on the fees paid, the Post says.
Lawyers working for trustee Irving Picard have been paid as much as $742 an hour, according to Kotz’s report. At the end of the year, Picard and his firm Baker & Hostetler had earned $130 million, the Washington Post says, citing an SIPC letter. Picard was hired without competitive bidding, although a court approved the appointment.
A spokeswoman for Baker & Hostetler did not comment when contacted by the Washington Post. SIPC President Stephen Harbeck told Reuters in an interview that new assessments will replenish the SIPC fund and he absolutely disagrees that it will be depleted.
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