SEC Settlements in Ponzi Scheme Cases: Putting Madoff and Stanford in Context

Charles Ponzi

Charles Ponzi

In the last six and half years the Securities and Exchange Commission has reached settlements with over 300 defendants in cases related to alleged Ponzi schemes. NERA Consulting has been tracking these SEC settlements since the Sarbanes-Oxley Act was enacted in July 2002.

In that time frame there have been 12 Ponzi scheme settlements that involved alleged fraud in excess of $50 million. Jan Larsen and Paul Hinton of NERA Consulting put together an overview of those 12 cases and their SEC Settlements: SEC Settlements in Ponzi Scheme Cases: Putting Madoff and Stanford in Context (.pdf).

Based on the settlement amounts shown in this report, things don’t look good for the Madoff investors. The settlement amounts are small, averaging less than 10% of the fraud size. Most of the total settlement amount is tied to the Private Capital Management, Inc. case where $112 million of the $145 was recovered.

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Thanks to Bruce Carton of Securities Docket for pointing out this report (via Twitter).

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2 Responses to SEC Settlements in Ponzi Scheme Cases: Putting Madoff and Stanford in Context

  1. Sumner Blount March 24, 2009 at 9:35 am #

    very interesting data. I would be really interested to see a column that listed the “average jail sentence” for each of these cases. My hunch is that in many cases, these people got off relatively easy after they settled with the SEC.

  2. Doug Cornelius March 24, 2009 at 10:04 am #

    Sumner –

    I agree, the jail sentence information would be interesting. I sent a message to the authors to see if they have the information and are willing to share it.