Some Madoff investors may get funds in months

WASHINGTON (Reuters) - Some of the investors who lost money in an alleged $50 billion fraud run by Bernard Madoff may be able to recover funds within the next few months, the president of the Securities Investor Protection Corp said on Wednesday.

"That's when we hope that some of the simpler claims can be resolved," SIPC President Stephen Harbeck said.

SIPC is a non-profit agency set up by Congress to maintain a fund to help investors who had accounts at brokerage firms that failed. The fund, supported by broker dealer assessment fees, has $1.6 billion.

SIPC has mailed more than 8,000 applications to Madoff investors so they can file claims for any money they may have lost.

Harbeck said it was too early to say how many investors had been defrauded, adding that he would have a better idea within six months. He also said he did not know whether SIPC would have to seek additional funding from Congress.

"It's too early to speculate on that until we see what the consequences are," said Harbeck.

Madoff has been accused of defrauding investors, banks, and charities around the world.

Harbeck said SIPC would meet with the U.S. Securities and Exchange Commission later on Wednesday to discuss the Madoff case and how claims would be satisfied.

SIPC charges member firms a fee of $150 a year, which has not changed since 1995. Harbeck said the fee has been sufficient to cover the agency's purpose, but said SIPC will have to consider raising it. "We certainly have to rethink that."

SIPC has a $1 billion line of credit with the U.S. Treasury Department. A trustee has identified more than $830 million in liquid assets related to Madoff's investment firm that may be subject to recovery and is searching for more.

It is not known how much money investors will be able to recover given SIPC's relatively small reserve. Though, given that the maximum SIPC can pay an investor is $500,000, Harbeck said the impact to SIPC's fund will not be as great as the purported fraud.

"The $50 billion figure includes non-existent profits. Since there is a cap on what we can pay any one individual, the drawdown on our funds is not as severe as the entire loss," Harbeck said.

SIPC has yet to receive Madoff's list of assets, which was turned over to the SEC and not made public. Lawmakers asked Harbeck on Monday to give them the list. On Wednesday, Harbeck said he did not know what he could hand over to Congress.

(Reporting by Rachelle Younglai; editing by Carol Bishopric)