Latest reports indicate that no stocks were actually  purchased for customers:

“We have no evidence to indicate securities were purchased for customer accounts,” said Irving Picard, the court-appointed trustee overseeing the liquidation of Madoff’s assets.

At a meeting for investors, Picard detailed the history of the case and how claims will be processed. He said his office has received 2,350 claims so far and they expect the number of claims to double.”

Each of these claimants can now be covered for losses up to $500,000. For 5000 (conservative estimate) claims, that means there could be as much as  $2.5 billion in pay-outs.