Jan. 5 (Bloomberg) -- The trustee liquidating Bernard Madoff’s firm found $830 million in liquid assets in the defunct brokerage to meet claims that may exceed any previous case, the president of the Securities Investor Protection Corp. said.

Assets identified by trustee Irving Picard may be subject to recovery for customers of the Madoff firm, SIPC President Stephen Harbeck told a congressional committee today. “The trustee and SIPC will be aggressive in their pursuit of such recoveries” from the alleged $50 billion Ponzi scheme, he said.

Madoff, 70, was arrested Dec. 11 and charged with securities fraud at federal court in Manhattan after allegedly telling his sons his investment advisory business was a Ponzi scheme, in which early investors were paid with money from subsequent participants. Madoff is free on bail and hasn’t formally responded to the charges or entered a plea.

The clients included banks, hedge funds, charities, universities and wealthy individuals. They had about $37 billion with Bernard L. Madoff Investment Securities LLC, according to a Bloomberg News tally of disclosures and press reports.

Customer claims from Madoff investors “will be in excess of any previous case,” Harbeck said. Picard “has in place a team of highly trained attorneys, forensic accountants and computer specialists to assist him in locating and recovering assets.”

Liquid Assets

Picard identified at least $830 million and perhaps as much as $850 million in liquid assets, Harbeck told the House Financial Services Committee. “After that, it becomes a job of hunting them down.”

Picard sent 8,000 claim forms to people who appeared to have invested with Madoff, and published a notice in major newspapers telling customers how to recover lost money.

The forms were sent to people “who appear to have been customers” of Madoff’s firm “with open accounts within the past 12 months,” Picard and Harbeck said today in a joint statement. Madoff’s advisory business was estimated to have had more than 4,000 customers, people familiar with the matter said last month.

The Madoff allegations are being treated by SIPC as a “missing asset” case, which may give it more flexibility to reimburse clients, Harbeck said. SIPC doesn’t protect investors from market losses.

The organization has $1.6 billion in assets generated by fees on member broker-dealers, $1 billion in credit available from the U.S. Treasury and another credit line from an “international consortium of banks,” Harbeck said.

The credit from Treasury has not increased since 1970, Harbeck said. “That’s certainly something we will look at as we determine how deep into SIPC’s resources this event will take us,” he told the committee.

To contact the reporter on this story: Ian Katz in Washington at ikatz2@bloomberg.net.

Last Updated: January 5, 2009 18:13 EST