SIPC Insurance, Bernie Madoff Ponzi Scheme and BJ Group Class Action; What do they have in common?

Bob Brinker spent the first hour of today's program talking about Bernie Madoff's ponzi scheme and how the trustee is trying to get what little money is left to distribute to victims. Bob highly recommended The Madoff Chronicles: Inside the Secret World of Bernie and Ruth

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Brinker said:

"I would like as many Moneytalk listeners as possible to read The Madoff Chronicles: and I'll tell you why. Because when you read this book very, very uh reader friendly book... its not going to take you a lifetime to digest this one... It's also entertaining because its a true life crime story... an ongoing crime story. Ongoing drama playing out.... I think The Madoff Chronicles is a fun read as well as an educational read.... it underscores importance of knowing what you are doing with your money... diversifying your investments, know where your money is... Brian Ross is one of the finest in the business.. For a first book, what a heck of a job he did."

Currently, the book is only $13.59 at Amazon.com where it is eligible for FREE Super Saver Shipping on orders over $25.

Perhaps get Madoff's Other Secret: Love, Money, Bernie, and Me or or Too Good to Be True: The Rise and Fall of Bernie Madoff to save the shipping and handling fees.

One caller suggested that anyone who got anything out should be subject to "clawback" just as anyone who was paid with counterfeit money wouldn't be able to spend it. I wonder if he would go after the janitor who cleaned the offices or the receptionists who were paid with money collected by Madoff? Paying office staff is just as important as paying investors who withdraw from their accounts to perpetuate a fraud.

What about the old, retired people who gave Madoff say $1,000,000 then took 5% a year out to live one while they allowed the rest to grow as any honest investor would? Lets say one of those honest investors used the money to pay the mortgage on their home, should they have to give their home back? I don't think so but I am not a legal expert by anyone's definition. What do you think?

Also, how does SIPC insurance work on this? Lets say "investor J" retired, put in $1,000,000 and took out 10% a year to live for 10 years. Over the 10 years, "Investor J" got out a bit over $1,000,000 and "investor J'" statement said he had over $1,100,000 since the actual return was supposed to be about 11% a year. Should "investor J" still get SIPC insurance for the $500,000?

Finally, we find it interesting that just days after publishing an article here titled BJ Group - Genworth Financial Class Action, Bob Brinker choose to talk again about the Madoff case as if there wasn't been enough new and more important economic issues this week to discuss. Coincidence? I think not.

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Gil Gross Replaced Bob Brinker at WABC-NY

We get a lot of emails asking what happened to "Moneytalk" hosted by Bob Brinker on WABC in New York and why was KGO-AM in San Francisco's business reporter Lynn Jimenez chosen as a permanent guest host for Moneytalk. I believe the answers to both questions are very much related.

On July 27, 2009 we reported

WABC Radio NY Drops Moneytalk Hosted by Bob Brinker.

Then on August 16, 2009 we reported and asked

Gil Gross' "Real Estate Today" Replaced Bob Brinker Moneytalk at WABC in NY. Is KGO in SF Next?

WABC replaced "Moneytalk" with Gill Gross's nationally syndicated, two hour "Real Estate Today" radio program. Gill Gross does the 2 to 4PM weekday slot on top ranked KGO-AM. (KGO is 810 on your radio dial in the San Francisco Bay Area.) Gross replaced the late Pete Wilson in 2007 at KGO and has done a fantastic job replacing a Bay Area icon.

In the Bay Area, "Real Estate Today" is now heard on "Hot Talk" KSFO 560-AM on Saturdays from 1 to 3PM. Los Angeles gets the show on "Talk Radio" 790 KABC-AM on Saturdays from 8 to 10AM.

Citadel owns KABC, KGO and KSFO plus Moneytalk. If they replaced "Moneytalk" with "Real Estate Today" in New York it was probably due to ratings since they own both shows. I believe Lynn Jimenez was picked as a permanent guest host for Moneytalk for several reasons including:

• Brinker is getting old and could retire or die early like his parents did.
• Demographics: Women and Hispanics are under represented on financial radio shows carried by major networks.
  

Several times in the past years, highly qualified Terry Savage was the guest host whom I thought was FAR better than Bob Brinker at actually listening to callers' questions and giving answers unbiased by the need to sell Marketimer newsletters. Terry would have made the ideal replacement, perhaps even moving Brinker to part time status in preparation for retirement.

From the "Terry Savage Fan Club"

Terry's financial knowledge comes from experience in the trenches. She started her career as a stockbroker, and became a founding member -- and the first woman trader -- on the Chicago Board Options Exchange. Savage was also a member of the Chicago Mercantile Exchange's International Monetary Market where she traded interest rate contracts and currency futures. She is a registered investment advisor for both stocks and futures.

I have exchanged emails with Terry and continue to get her regular emails on both her fans and friends lists. Terry had expressed an interest in doing Moneytalk as the regular guest host but I believe she was passed over for Lynn Jimenez because Lynn has the Hispanic demographic and, probably more importantly, Lynn is already an employee of Citadel through KGO in San Francisco. Similar to baseball, Citadel prefers to bring up cheaper talent through the farm system than going out to get a high priced, very talented free agent.

For more information, see:

• "Gil Gross Fan Club"
  
• "Terry Savage Fan Club"
• "Lynn Jimenez Fan Club"
  
• KGO-AM's Gil Gross now does show on KSFO 560