Friday, December 12, 2008

70-Year Old Wall Street Powerbroker Confesses to Fraud Scheme

I know I'm not a news service, but . . . could this be a trend? Or is everyone trying to get out with as much cash as they can before the coming deluge? Maybe there's a forgiveness clause if you're over 70. But with housing prices today, is he really good for the bond? From Forbes we read:

Mad Madoff Ruthie Ackerman, 12.11.08, 07:10 PM EST Market maker arrested in Ponzi scheme he estimated at $50B. It may not offer quite the range of possibilities for abuse as being the governor of a heavily populated state, but apparently owning a long-running Wall Street firm allows your basic septuagenarian market maker to make monkeys out of his clients. Very poor monkeys. The Securities and Exchange Commission on Thursday charged Bernard L. Madoff Investment Securities and its eponymous founder with a "stunning fraud" of "epic proportions" - a "multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm." The SEC is asking the federal court in Manhattan to freeze the firm's assets and appoint a receiver. The SEC said Madoff had indicated to two of his senior employees on Wednesday that he had been been "paying returns to certain investors out of the principal received from other, different investors" for years. He estimated that losses from the fraud were at least $50.0 billion. The SEC filings said regulatory files showed that the firm had more than $17.0 billion in assets under management at the start of the year and that virtually all of them are missing, though on the bright side, investors would've lost about half of that in the stock market this year anyway. "We are alleging a massive fraud - both in terms of scope and duration," said Linda Chatman Thomsen, director of the SEC's Division of Enforcement. "We are moving quickly and decisively to stop the fraud and protect remaining assets for investors, and we are working closely with the criminal authorities to hold Mr. Madoff accountable." Madoff was arrested and arraigned late Thursday, appearing shaken and staring at the ground as reporters peppered him with questions. Madoff, 70, was released on his own recognizance after posting a $10.0 million bond secured by his Manhattan apartment. Bernard L. Madoff Investment Securities, founded in 1960, is an international market maker, which provides executions for banks, brokers and other financial institutions, according to its website, which was still up and running Thursday evening. The site says that the firm has over $700.0 million in capital. Ironically, the company claimed to be a safe haven in these volatile financial times. “In an era of faceless organizations owned by other equally faceless organizations, Bernard L. Madoff Investment Securities harks back to an earlier era in the financial world: The owner's name is on the door,” the firm’s website said. “Clients know that Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm's hallmark.” Madoff is a former chairman of the Nasdaq Stock Market and was also on the board of governors of the National Association of Securities Dealers. Reuters contributed to this article.
Happy Holidays! Suzan ____________

2 comments:

Serving Patriot said...

Suzan,
Seems like Bernie's ill-gotten gains would be more than sufficient seed money to loan to some needy manufacturers in their moment of crisis...

How hard is it really to seize those assets and then loan them out? Doesn't seem very hard at all!

And if it turns out that Madoff is indeed innocent, by the time that jury verdict is rendered, then the loan money could be given back - with a little interest on the side!

Then again, guys like Madoff think they are going to take it all with them when they die and go to heaven, so I guess he wouldn't want to share.

SP

Suzan said...

Good point, SP,

But

You assume that there will be some public repayment from this dastardly scumbag enterprise (and I'm so rarely prone to overstatement!).

My guess is that this guy will pull a Ken Lay - his record will be wiped clean after he disappears and there will be no recompense for anyone - thus his telling blank stare during his surrender. Seems I remember several of these in the last eight years (Bremer, Wolfowitz et al.).

One more "So long, suckers!" from the top tier.

However, if anyone asks me for my opinion, I'll refer them to you.

Love ya!

S