The Internet doesn't have the handspun feel of a security blanket, but it's offering some comfort for former clients of Bernard Madoff and his firm who lost some or all of their life savings.
Members-only Web sites and forums have emerged that provide a safe haven for people to share their pain and knowledge.
But whatever solace investors may find on the Web, it's also a place where they'll find harsh and sometimes disparaging comments about the choices they made.
Coping With Huge Losses
One online resource was spearheaded by Ronnie Sue Ambrosino, a retiree living in Delray Beach, Fla., who says she invested with Madoff's firm for almost three decades.
She lost everything.
"It was every penny I had — my entire life savings," she says. "Everything I ever worked for, the profits from the sale of my house. Every minute of overtime. Everything was invested with Madoff. We were trying to build a financial future."
To help cope with her loss, she helped to launch the Madoff Survivors Group. What started as an emotional support group that met in an office has become an online community of about 160 investors. They share financial and legal information, as well as updates about what the government is doing via a private Google group. Everyone is screened before they can join and they have to submit a request via e-mail to start the process.
Finding Help On The Web
Ambrosino has been a guest on TV and is making the rounds on the Internet, too. She and about a dozen other former Madoff clients are testing one of the new members-only Web sites, Bernardmadoffvictims.org, which functions just like Facebook or LinkedIn.
In order to join, people must submit documentation that they were an account holder and that they lost money in the alleged fraud. Once accepted, members can create a profile that includes their age, geographic location and any other details they want to share. They also have the option to use their real name or a pseudonym.
"Participation in this site will empower victims to learn from each other — not just about how to recover their money, but how to move on with their lives," says Teri Ross, the founder of the site.
Ross, who is the president of Imagine That, a Web strategy and marketing firm based in Minneapolis, did not lose money from investments with Madoff, but she says that her family was the victim of fraud committed by one of her siblings in 1995. Ross makes it clear on the site that it's not open to solicitors and "non-victims."
The site features discussion forums, live chats and a blog. Members can upload and download files they want to share.
There's also a group on Facebook, with more than 130 members, aimed at helping families affected by the Madoff scandal.
On Monday, one member of this group with the screen name "No" brought up the issue of how to deal with reporting the investment losses on tax forms: "Regarding the IRS, we are all awaiting guidance but the [consensus] thus far is [to] take the theft loss for 08 and make the proper adjustments going back 3 years for taxes paid on 'false profits.'"
Government And Industry Assistance
"We're trying to work with the government who is not being very responsive to us," Ambrosino says. "It's very difficult to get Congress, SIPC [the Securities Investor Protection Corp.] or the IRS to respond to us. We're left in the dark."
Steve Harbeck, the president and CEO of SIPC, says the agency, which is an industry group that helps investors recover funds from brokerage firms that fail or file for bankruptcy, is urging any Madoff investor to file a claim with the trustee (the forms are available on both the SIPC or trustee Web sites).
"We are trying to answer their questions as best we can although we don't have access to the paperwork that they have. They've got to provide us with the best documentation they can," he says, adding that despite the agency's small staff it has remained "current" in answering Madoff correspondence.
Spotlight On Clients
The spotlight, however, did fall on investors like Ambrosino in a not-so-glamorous way last week when their names and addresses were released in a New York bankruptcy court. Web sites, like Madoffsearch.com, quickly cropped up, offering a searchable database of everyone on the list.
The Wall Street Journal created a map of U.S. clients based on their zip codes.
Some of the information on the Web has also spawned some ugly commentary.
On Friday, a map showing red dots that represent the home addresses of former Madoff clients who live in Manhattan was posted on Curbed.com, a blog that focuses on real estate and neighborhood issues in New York City. Among the comments about the map are anti-Semitic remarks about the clients.
Ross of Bernardmadoffvictims.org says she is "saddened by the many racist comments" she has seen online. "I think there are a select few who have used the Madoff case to advance their personal racial bias and don't feel that these comments reflect society's views as a whole," she says.
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