Bernard Madoff, the longtime Wall Street executive accused of cheating investors around the world out of $50 billion, scrambled to find friends or relatives to guarantee his bond on Tuesday and keep him out of jail.
In Massachusetts, where the disgraced investor long cultivated a loyal group of wealthy individuals, the state's chief securities regulator subpoenaed Bernard L. Madoff Investment Securities and Cohmad Securities Corp, a firm that marketed Madoff investment products.
The two firms must hand over the names and addresses of all local residents who let Madoff invest their money by December 29. They must also deliver notes, emails, meeting agendas related to investments made since 2000, William Galvin, the state's Secretary of the Commonwealth, said on Tuesday.
In New York, Madoff, who was arrested last week, has not yet fully met the conditions of his $10 million bond, according to court papers. He must find three co-signers to guarantee the bond.
If he fails to meet all the conditions, prosecutors could seek to have the 70-year-old Madoff jailed, pending trial. A court hearing was set for Wednesday on bail matters after a Tuesday hearing was postponed.
Madoff, a former chairman of the Nasdaq Stock Market, faces up to 20 years in prison and a maximum fine of $5 million if convicted.
The U.S. Securities and Exchange Commission, which has been accused of missing red flags about Madoff's investment business, is asking its internal watchdog to probe the agency's conduct in the case.
SEC Chairman Christopher Cox said he was "gravely concerned" by the agency's "apparent multiple failures over at least a decade" to thoroughly investigate allegations or seek formal authority to pursue them.
As more banks, hedge funds and wealthy investors around the world realize they fell victim to a man long respected on Wall Street for the steady returns that his funds produced year after year, their outrage has grown.
LAW SCHOOL LAWSUIT
"The names and sizes of those exposed to Bernard Madoff keep growing and most remarkable of all is the concentration of investments made by funds of hedge funds which promise their clients a diversified portfolio," said Philippe Bonnefoy, chairman of the asset allocation committee at Cedar Partners, an investment adviser.
A fund of hedge funds is a basket of funds selected by the manager to spread around risk.
New York Law School sued Ascot Partners LP, an investment firm, general partner J. Ezra Merkin and auditor BDO Seidman LLP on Tuesday over investments with Madoff.
Massachusetts Mutual Life Insurance Co acknowledged its exposure to Madoff after a hedge fund unit invested heavily with him. Tremont Holdings Inc's Rye Investment Management unit lost roughly $3 billion, nearly all of the money the unit managed, people familiar with the matter said.
Madoff is also closely tied to Carl Shapiro, a 95-year-old Boston philanthropist who gave much of his fortune to the city's Beth Israel Deaconess Medical Center and the city's Museum of Fine Arts.
Austria's Bank Medici, a closely held bank serving wealthy clients, also said it was affected by Madoff's scheme, but declined to give a total for its losses.
At the same time, prosecutors and regulators asked people who suspect they lost money to Madoff to come forward.
The U.S. Attorney's Office in New York, which is prosecuting the Madoff case, set up a website for investors who may have been victimized. It also posted an FBI hotline number, 212-384-2359, for investors to call.
SIFTING THROUGH THE PAPERS
Investors were asked to gather any documents related to their Madoff investments and to check the website and others set up by the SEC, the trustee of Madoff's brokerage business and the court-appointed receiver in the case.
Lawyers worried that many of the financial statements that Madoff's firm mailed to clients were not accurate, and that it will take months to sift through the papers.
"This is a mess and it will take much longer than normal," said Douglas Hirsch, a partner at law firm Sadis & Goldberg, describing the work facing the trustee appointed to oversee the liquidation of Madoff's firm.
The Securities Investor Protection Corp, a nonprofit organization that provides limited insurance on investors' accounts, was named as trustee on Monday.
Madoff, who was well-known on the charity ball circuit and supported cancer and diabetes research, also gave about $238,200 to political candidates, parties and committees, mostly Democratic, since 1991, according to the Center for Responsive Politics, which tracks political giving.
U.S. Senator Charles Schumer, a New York Democrat, received $12,000, while U.S. Rep. Edward Markey, a Massachusetts Democrat, received $10,000 over the years, the Center found.
The impact of Madoff's alleged fraud may be felt most severely among hedge funds. For example, the Credit Suisse/Tremont Hedge Fund Index fell 4.15 percent in November, far more than the preliminary 0.7 percent decline reported last week.
Standard & Poor's said it will review public sector entities, such as universities, that invested with Madoff, to see whether their ratings should be cut as a result of their likely investment losses.
Source: Agencies
Showing posts with label Bernard L Maddoff. Show all posts
Showing posts with label Bernard L Maddoff. Show all posts
Wednesday, December 17, 2008
Monday, December 15, 2008
$50 bn Madoff victims include super rich to charities
From a Jewish youth charity in Boston to major banks as far afield as Zurich, the list of investors who say they were duped in one of Bernard L Maddoff Wall Street's biggest Ponzi schemes is growing.
Around the world, investors who sunk cash into veteran Wall Street money manager Bernard Madoff's investment pool spent the weekend calculating how much exposure they might have. The 70-year-old Madoff, well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested Thursday in what prosecutors say was a $50 billion scheme to defraud investors.
One thing was clear in the fallout from his arrest: The alleged victims span from the super rich, to pensioners and powerful financial institutions, to local charities. Some investors claim they've been wiped out, while others are still likely to come forward.
"There were a lot of very sophisticated people who were duped, and that happens a great deal when you've had somebody decide to be unscrupulous," said Harvey Pitt, a former chairman of the Securities and Exchange Commission, a regulator in charge of monitoring investment funds like the one Madoff operated.
"It isn't just the big investors," he said. "There's a lot of charitable and foundation money involved in this, which is the real tragedy."
Charities across the country are expected to be directly affected by the collapse of Madoff's investment fund. The assets of Bernard L. Madoff Investment Securities LLC were frozen Friday in a deal with federal regulators and a receiver was appointed to manage the firm's financial affairs.
One of the largest financial scams to hit Wall Street has investors wondering if they'll ever get their money back.
In Boston, the Robert I. Lappin Charitable Foundation, a charity that financed trips for Jewish youth to Israel, said on its Web site Sunday that the money for its operations was invested with Madoff.
"The money needed to fund the programs of the Lappin Foundation is gone," it said. "The foundation staff has been terminated today."
New Jersey Sen. Frank Lautenberg, one of the wealthiest members of the Senate, entrusted his family's charitable foundation to Madoff. Lautenberg's attorney, Michael Griffinger, said they weren't yet sure the extent of the foundation's losses, but that the bulk of its investments had been handled by Madoff.
Lautenberg's foundation handed out more than $765,000 to at least 100 recipients in 2006, according to the most recent listing on Guidestar, which tracks charitable organization filings.
The foundation helps support a variety of religious, educational, civic and arts organizations in New Jersey and elsewhere, and its contributions range from a gift of than $300,000 to the United Jewish Communities of MetroWest New Jersey to a $2,000 donation to a children's program at the Hackensack Medical Center.
Source: Agencies
Around the world, investors who sunk cash into veteran Wall Street money manager Bernard Madoff's investment pool spent the weekend calculating how much exposure they might have. The 70-year-old Madoff, well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested Thursday in what prosecutors say was a $50 billion scheme to defraud investors.
One thing was clear in the fallout from his arrest: The alleged victims span from the super rich, to pensioners and powerful financial institutions, to local charities. Some investors claim they've been wiped out, while others are still likely to come forward.
"There were a lot of very sophisticated people who were duped, and that happens a great deal when you've had somebody decide to be unscrupulous," said Harvey Pitt, a former chairman of the Securities and Exchange Commission, a regulator in charge of monitoring investment funds like the one Madoff operated.
"It isn't just the big investors," he said. "There's a lot of charitable and foundation money involved in this, which is the real tragedy."
Charities across the country are expected to be directly affected by the collapse of Madoff's investment fund. The assets of Bernard L. Madoff Investment Securities LLC were frozen Friday in a deal with federal regulators and a receiver was appointed to manage the firm's financial affairs.
One of the largest financial scams to hit Wall Street has investors wondering if they'll ever get their money back.
In Boston, the Robert I. Lappin Charitable Foundation, a charity that financed trips for Jewish youth to Israel, said on its Web site Sunday that the money for its operations was invested with Madoff.
"The money needed to fund the programs of the Lappin Foundation is gone," it said. "The foundation staff has been terminated today."
New Jersey Sen. Frank Lautenberg, one of the wealthiest members of the Senate, entrusted his family's charitable foundation to Madoff. Lautenberg's attorney, Michael Griffinger, said they weren't yet sure the extent of the foundation's losses, but that the bulk of its investments had been handled by Madoff.
Lautenberg's foundation handed out more than $765,000 to at least 100 recipients in 2006, according to the most recent listing on Guidestar, which tracks charitable organization filings.
The foundation helps support a variety of religious, educational, civic and arts organizations in New Jersey and elsewhere, and its contributions range from a gift of than $300,000 to the United Jewish Communities of MetroWest New Jersey to a $2,000 donation to a children's program at the Hackensack Medical Center.
Source: Agencies
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