(02-02-2024, 03:47 PM)Jaguarmeister Wrote:

(02-02-2024, 03:33 PM)KingIngram052787 Wrote: I'm not sure that's how it works.  I know this isn't apples to apples, but didn't the people who got out of and made money off of the Bernie Madoff ponzi scheme have to give all of their gains back since they were basically illegal (even unbeknownst to them)?

I don't know the full details of the Madoff victims' payoff off hand, but I can see why they weren't treated as such, if so.  There aren't actually "gains" in a ponzi scheme.  Madoff was just calling them "gains", but really it was just new investors' money.  That's a big difference from actually risking capital through a true investment broker or gambling establishment and coming out a winner whether they were led to believe that was the case or not.  In short, a criminal enterprise calling a return in excess of initial investment "gains" doesn't make it so nor should it absolve the recipient of having to pay those funds back to other aggrieved parties.

The lesson from that should be if you have an investment advisor outside of one of the big brokerage firms like Fidelity or Schwab, your advisor should still custody your assets in separate accounts in your name at one of the big brokerage houses.  They can't do what Madoff did when custodied at places like that.

Legally the big firms don't have to give you squat if they gamble your money and get toasted on margin calls. The law is on the big investment places and your brokerage account is just an asset they can liquidate to satisfy their debts. Unlike the Jaguars organization thief who will get jail time the brokerages will just cut your loses.

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