Who Knew There Were Net Winners in the Madoff Scheme?

The Wall Street Journal reports that U.S. Bankruptcy Judge Burton Lifland (New York City) today ruled that “net winners” (those who withdrew more funds than their initial investments and later deposits) in Bernard Madoff's ponzi scheme were not entitled to recovery.
 
The opinion explains:  “Equality is achieved in this case by [looking] solely to deposits and withdrawals that in reality occurred. To the extent possible, principal will rightly be returned to Net Losers rather than unjustly rewarded to Net Winners under the guise of profits.”
 
I’m inclined to agree.  I am sympathetic to all of the victims of Madoff’s scheme, but to walk away with all of your principal (or more) from this fiasco is about as much as one could reasonably hope. This is especially true given what happened to the market in the time frame of the Madoff investments. 

Any investment carries risk, and one of those risks (unfortunately) is fraud. It seems proper to me that those who clearly lost the money they input on the deal should be first in line for recovery.

--Josh Fershee