The statements of the Senators and Representatives cannot be ignored without substituting the intent of SIPC and the Trustee for the intent of Congress. For the actions and desires of SIPC and the Trustee are antithetical to the points made by leading Senators and Congressmen (as well as by President Nixon and Secretary Kennedy). Little wonder SIPC and the Trustee never mention the statements of Senators and Representatives.
For the convenience of this Court, the relevant statements in the hearings, in the Congressional reports, and on the floor of the House and Senate are collected in the brief of Appellant Lawrence Velvel, with the relevant pages set forth in their entirety in the Addendum to his brief.
In conclusion, let me add that the decision below was a summary judgment on which no discovery from SIPC or the Trustee was allowed even when crucial discovery was requested and would have been followed by further crucial discovery. Examples are discovery on whether a deficiency of money in the SIPC fund was one reason for the use of CICO notwithstanding its ravaging of Congressional intent, and discovery on why investors' accounts were not credited with at least half a billion dollars of earnings from short term Treasuries and money market funds. The decision below must be reversed because of a denial of all discovery even were the decision otherwise to be upheld.
As made clear many times in this essay, I think the foregoing argument on legislative intent is the key to this case. Others don't, including, I believe, two of our oral advocates. The argument was not delivered.
What happened, I at least believe, was this: It was finally decided who the advocates for our side were going to be. After hearing about a moot court held on March 1st, and that Helen was doing the rebuttal, I wrote the group to express my best wishes and to say that, although Helen told me she would make the points about the legislative history on rebuttal if at all possible, I knew that this might not prove possible due to the unforeseeable exigencies of rebuttal, and that I hoped the legislative history would be presented by one of our other two advocates. It wasn't. And because of the exigencies of rebuttal, where she had to fill a lot of holes, Helen, who had only six minutes if I remember correctly, had no time to present it on rebuttal either.
So, in short, I agreed to a deal which was not carried out because other advocates were not, I think, enamored of the point and, Helen, being the "rebuttalist" and having to desperately try to fill holes, had no time to carry it out. If any of this is wrong, I am willing to stand corrected.
But what I do hope is wrong is my view that the legislative intent is the key to winning the case, a view I believe not shared by certain colleagues, and that was not presented to the Court. One can only hope that we win without having presented the legislative history to the Court (except for a very few comments made by Helen Chaitman on the run so to speak (because she lacked time).
Let me turn now to Chaitman's rebuttal argument. She began by saying she represents roughly 500 victims, some of whom began investing with Madoff in the 1960s and some in the 1980s. The Trustee she said is "tak[ing] the position that no statement that my clients received over a period of up to 50 years is binding, because the Trustee, ignoring the Statute of Limitations, is netting out deposits and withdrawals going back 50 years. There is no basis in the law to do that." (Tr. 72.) "If you look at New Times," she continued, the Court there "recognized that the purpose of SIPA" was to protect investors -- who were giving up the right to obtain security certificates (because SIPA was part of the movement to holding securities in street name) -- by giving them up to $500,000 in insurance (from the SIPC fund). (Tr. 72-73.) The SIPC fund is thus different from the customer property fund, although "It was Congress that decided that a customer's net equity claim would be determined for both purposes in exactly the same way." (Tr. 73.) But "Congress didn't say that any SIPC Trustee has the right in his discretion to determine whether that's the fair way. It's not a question of fair." (Tr. 73.)