Bernard L. Madoff $50 Billion Investment Fraud

[Luke_Wilbur]

On December 15, 2008, the Honorable Louis L. Stanton, a Federal Judge in the United States District Court for the Southern District of New York, appointed Irving Picard as Trustee for the liquidation of Bernard L. Madoff Investments Securities LLC (“BMIS”) pursuant to the Securities Investor Protection Act (“SIPA”) as set forth in the attached order.

LINK

 

Mr. Picard supersedes Lee S. Richards, the previously appointed Receiver for BMIS and all claims by customers of BMIS will be processed by Mr. Picard as SIPA Trustee. Customers and claimants should refer to the website of the Securities Investor Protection Corporation for information about the processing of claims.

SIPC.ORG

 

Mr. Richards continues to serve as Receiver for Madoff Securities International Ltd. pursuant to the attached order.

LINK

 

Should you have further questions, please contact the Trustee at the following number: 888-727-8695.

 

[Guest Where is MY MONEY]

Bernard L. Madoff Investment Securities LLC and Madoff Securities International played a unique role in U.S. equities markets. Madoff Securities won a wide array of clients in the U.S. and abroad because it offered its clients the best prices and fastest execution available in the U.S. market.

 

Bernard L. Madoff Investment Securities LLC

885 Third Avenue

New York, NY 10022

Fax: (212) 486-8178

Main Telephone: (212) 230-2424

Client Service Desk: (212) 230-2435

Sales Trading Desk: (212) 230-2456

New Clients: (212) 230-2422

 

 

 

Madoff Securities International Limited (Regulated by FSA)

12 Berkeley Street Mayfair,

London WIJ8DT

Telephone: 44-207-493 6222

Fax: 44-207-493 6082

 

 

BCP Facility

75-20 Astoria Boulvard

Queens NY, 11370

Trading: 718-533-2300

Client Services Desk: 718-533-2335

[Guest SEC ARE A BUNCH OF CROOKS]

MADOFF’S GUIDE TO ORDER HANDLING- Nasdaq Securities

 

Jump to specific categories:

 

Introduction

Price

Liquidity

Smart Order Routing

Speed

Limit Order Exposure

Special Situations

SEC Order Handling Rules

 

INTRODUCTION

 

A PRIMER FOR EXECUTION QUALITY

 

Bernard L. Madoff Investment Securities LLC has been providing quality executions for broker-dealers, banks, and financial institutions since the firm’s inception in 1960. During this time, Madoff has compiled an uninterrupted record of growth, which has enabled us to continually build financial resources. With more than $600 million in firm capital, Madoff currently ranks among the top 1% of U.S. Securities firms. Our sophisticated proprietary automation and unparalleled client service delivers an enhanced execution that is virtually unmatched in our industry.

 

The hallmarks of our system are price improvement, speed, and enhanced liquidity delivered with a level of client service that sets us apart from our competitors. Madoff utilizes a market based, algorithmic approach to defining price improvement and enhanced liquidity.

 

Discussions with many of our clients have brought to light several key concerns with the decimal-pricing environment: The difficulty of defining "meaningful" price improvement when stocks trade in pennies, the possibility of significantly reduced liquidity at the quoted national best bid/offer (NBBO), and the prospect of an increased number of "split tickets" or multiple-piece fills even on their smaller sized orders. We have designed our system to address all of these concerns.

 

To help you fully understand the services we offer, we have developed this guide to illustrate how our execution system works. The cornerstones of a quality execution -- Price, Liquidity, Speed, and Limit Order Protection -- are highlighted below.

 

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PRICE

 

MARKET ORDER PRICE IMPROVEMENT

 

Madoff has been a market innovator in providing quality executions for its clients. Our clients can confidently state that their clients’ orders will have one of the highest rates of price improvement available in the industry today. In addition, we also offer an on-line audit trail documentation system. This will provide you with additional information to assist you in your obligation under the SEC’s Order Handling Rules to "…regularly and rigorously examine execution quality likely to be obtained from different markets or market makers trading a security."

 

 

 

Automatic Price Improvement for all Nasdaq Securities

 

Madoff provides automated price improvement opportunities for all Nasdaq securities in which we make a market. Our systems automatically price improve all eligible market and marketable limit orders by 20% of the NBBO spread. Eligible orders will include immediately executable market and marketable limit orders that are greater than 99 shares and are within the liquidity threshold for that stock where the NBBO is greater then two cents ($0.02). The amount of improvement will be based on the NBBO spread at the time we receive your order and will be rounded to the nearest penny. The improvement will be no less than a penny per share. Orders larger than the liquidity guarantee will not be eligible for automatic price improvement. Orders in the Exchange Traded Fund QQQQ will not be eligible for automatic price improvement.

 

Single Price Opening

 

Madoff's systems provide an automated, single-price opening for all Nasdaq issues in which we maintain a market.

 

Madoff has adopted the Nasdaq Official Opening Price (NOOP) that results from Nasdaq's Opening Cross process. All market (MKT) and market on open (OPG) orders that are received by Madoff before 9:27:00 am EST will qualify to receive the official Nasdaq opening price. Orders received after 9:27:00 may also receive the NOOP, but are not guaranteed to do so. For orders that are eligible to receive the NOOP, requests to cancel that are received by Madoff between 9:27:00 and 9:30:00 am may be rejected or handled manually.

 

To the extent that the Nasdaq cross process does not result in a market clearing price (whether the result of system failure, trading halt, or order imbalance), Madoff will execute all pre-open orders on a manual basis. In the event that there is no Nasdaq cross as the result of no eligible orders received by Nasdaq, Madoff will reference the first official Nasdaq print after 9:30:00.

 

Clients do not need to affix the OPG indicator in order to receive the opening price.

 

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LIQUIDITY

 

MADOFF’S ENHANCED LIQUIDITY

 

Madoff offers immediate liquidity for eligible orders under normal market conditions at the displayed price available in the marketplace as defined by the national best bid and offer (NBBO) at the time of receipt of your order and enhanced by our price improvement mechanisms. In Nasdaq securities, immediately executable market and marketable limit orders up to a preset liquidity threshold per stock, which may be as high as 1,999 shares, will be automatically executed in their entirety immediately upon receipt regardless of the size at the NBBO. Orders from 2,000 up to 50,000 shares will receive an automated execution that is based on a predetermined combination of Madoff's own capital and use of our smart router to efficiently access multiple points of liquidity. Orders 50,000 shares and greater will be handled manually. In certain less liquid securities, the guarantee for automatic execution may be less than 1,999 shares, at management's discretion. During periods of unusual market conditions, we reserve the right to adjust our execution parameters to appropriate levels. During periods when the NBBO is locked or crossed, our liquidity guarantee is reduced automatically. Madoff's liquidity guarantee is intended for regular and continuous, two-sided, non-momentum based business. Orders that do not meet this description may be subject to lower liquidity guarantees. In addition, our liquidity guarantee is intended to cover individual orders. Multiple orders that are the result of a single investment decision may be treated as a single order to the extent that the aggregate size of these orders exceeds our guaranteed liquidity threshold. Madoff reserves the right to adjust liquidity guarantees on a client by client basis.

 

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SMART ORDER ROUTING

 

ACCESS TO ADDITIONAL LIQUIDITY

 

Madoff’s systems are designed to automatically deliver enhanced executions through our price improvement and liquidity guarantees. In those instances where clients’ larger orders exceed our liquidity thresholds and we look to outside sources for liquidity and price discovery, we still offer our clients an enhanced execution. We achieve this in two ways. First, our systems automatically commit capital on a percentage of the order, mitigating the overall market impact of the order. Second, we rely on our proprietary smart router to automatically access additional sources of liquidity. This piece of sophisticated technology has been continuously updated to reflect the numerous new entrants to the marketplace. Our router is connected to all displayed quotes and takes into account factors such as the full depth of accessible quotes, availability of reserve sizes, speed of response, likelihood of getting a fill, and expenses related to the execution. All of these factors enable us to handle larger orders with efficiency and market leading quality.

 

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SPEED

 

AUTOMATION DELIVERS FASTER EXECUTIONS

 

By incorporating an algorithmic approach to defining price improvement, Madoff is able to reduce overall execution speeds for market and marketable limit orders. Madoff’s clients do not sacrifice speed in their efforts to achieve a quality execution .

 

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LIMIT ORDER EXPOSURE

 

SUPERIOR LIMIT ORDER HANDLING

 

Madoff offers its clients superior limit order protection. The SEC has mandated that all market centers and their participants reflect their clients’ interest in their quote. Our automated systems automatically execute or display all held limit orders less than block size (10,000 shares or $200,000) that are priced equal to or better than Madoff's quote or that will add to the size associated with such quote unless an express request is made by our client not to display the order. Our systems also guarantee client limit orders priority over any Madoff proprietary trader interest, in compliance with our Manning obligations. As a result, many of your clients’ limit orders will be executed with greater speed by our system than by our competitors. This occurs not only because your order is exposed on the Nasdaq Stock Exchange where it can interact with other NMS interest, but also because your order will interact with our other clients’ orders if there is a matching interest or activity at the limit price.

 

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SPECIAL SITUATIONS

 

Under certain circumstances orders will be subjected to automated or manual verification. This may be done through the use of orders sent to other market centers. An example of when this may happen would be locked and crossed markets, actively moving markets, and widely spread markets. In addition, orders may be subjected to clarification of the terms of the order (ie. limit price, special instructions, etc.). In these instances the price at execution time may be different (favorable or unfavorable) from the price at receipt time. Madoff also employs the following policies for special situations:

 

UNUSUAL MARKET CONDITIONS POLICY

 

During periods of unusual market conditions, often characterized by inordinate volumes and volatility, Madoff will attempt to continue providing our clients with the enhanced service benefits which are generally offered during normal market conditions. These enhanced service benefits include, but are not limited to, automatic execution, automated display of eligible client limit orders, automated limit order protection, automated price improvement opportunities and acceptance of stop orders. During unusual market conditions, however, it is possible that some or all of these features may be temporarily modified or suspended. The following are examples of some of the measures which Madoff may take with respect to client orders in either all or certain securities in an effort to efficiently and effectively address such unusual market conditions:

 

· The order size eligible for automatic execution may be temporarily reduced with the approval of senior management.

 

· Madoff may temporarily decline to accept stop orders. We will continue to honor existing stop and stop limit orders but may decline to accept new ones. Please bear in mind that stop orders are not eligible for Madoff's traditional liquidity guarantees.

 

· Certain orders and executions may be subject to review, adjustment, and/or cancellation

 

Madoff carefully considers the potential effect of such decisions on your clients' orders. Some of the factors evaluated by senior management prior to adjusting Madoff’s execution parameters are:

 

· The price volatility of a particular security;

· The number of client orders received by Madoff in a particular security;

· The total number of client orders received by Madoff.

 

These factors are continually reviewed by senior management throughout the trading day. Madoff’s goal is to achieve the highest level of client service given the prevailing characteristics of individual securities and the overall market conditions. Nevertheless, client expectations should reflect the unusual market conditions that may be present in the current marketplace. These are some of the potential consequences arising from unusual market conditions with respect to client orders:

 

· Potential delays in execution reports;

· Potential multiple execution prices and times for market orders accepted by Madoff which are greater than our current eligible order size. These orders are handled in their entirety on a "best efforts" basis.

 

STOP ORDER POLICY

 

Although stop orders are not an eligible order type within the Nasdaq Super Montage System, Madoff will accept stop orders in all Nasdaq stocks in which we maintain a market as an accommodation to our clients.

 

Order Eligibility: For orders received prior to the market opening, Madoff considers any "sell stop" to be eligible for acceptance by our system if the "stop" price is lower than the Nasdaq Official Closing Price (NOCP) from the prior trading day. A "buy stop" order would be eligible for acceptance by our system if the "stop" price is greater than the NOCP from the prior trading day.

 

For orders received during normal trading hours, Madoff considers any "sell stop" to be eligible for acceptance by our system if the "stop" price is lower than the Nasdaq Level 1 inside offering at the time we receive the order. A "buy stop" order would be eligible for acceptance by our system if the "stop" price is greater than the Nasdaq Level 1 inside bid at the time we receive the order.

 

If supported by your service bureau, orders that do not meet these criteria will be rejected back to the firm sending the order with a "no order taken" message.

 

Order Election: Once accepted by our system, "pre-opening sell stop" orders and "pre-opening buy stop" orders will be elected by the Nasdaq Official Opening Price (NOOP). Once elected, Madoff will attempt to execute these orders at the NOOP whenever possible.

 

Intra-day, a "sell stop" order will be elected when the Nasdaq Level 1 bid is equal to or lower than the order's "stop" price. A "buy stop" order is elected when the Nasdaq Level 1 offering is equal to or higher than the order's "stop" price. Upon election, stop orders will be treated as marketable orders and stop limits will be treated as limit orders. Elected stop orders and stop limit orders will automatically be afforded complete Manning protection. Marketable stop orders will receive an automated execution that is based on a predetermined combination of Madoff's own capital and use of our smart router to efficiently access multiple points of liquidity. At the end of a trading session, the Nasdaq Official Closing Price (NOCP) will be referenced to elect "buy stop" and "sell stop" orders. Such orders will be executed at the NOCP to the extent liquidity is available. If sufficient liquidity is not available, the orders will remain on Madoff's book and will be eligible for election starting with the next day's NOOP.

 

Stop orders are not eligible for Madoff's traditional liquidity guarantees. There is no guarantee that a "stop" order, once elected, will receive an execution at its "stop" price, the NOOP, or the NOCP.

 

 

TRADING HALT POLICY

 

When a trading halt has been declared and is currently in effect in a Nasdaq security, Madoff shall not trade in such halted Nasdaq securities in accordance with NASD Rules. The period surrounding a trading halt may be deemed subject to unusual market conditions. During this period, we will use our best efforts to continue to maintain an orderly market in the subject security. We will attempt to execute all orders received during the halt at the Nasdaq halt opening cross price following the resumption of trading in the security.

 

NOT HELD ORDER POLICY

 

By placing a "not held/working" order with us, you are directing that we handle your order on a "not held" basis, which means you are giving us discretion to properly exercise our brokerage judgment to seek to obtain a quality execution of your order. This means that we are relieved of our normal responsibilities for the time of execution and the price or prices of execution of such an order, provided that we otherwise exercise proper brokerage judgment. Specifically, we are not required to execute the order at the time of receipt or at the current market price at the time of receipt.

 

In addition, such discretion means that we may trade for our own account at prices equal to or better than those received by the "not held/working" orders. Therefore, there will be no protections afforded these orders pursuant to NASD IM-2110-2 (the so-called Manning Rule). Nevertheless, any purchases or sales executed on behalf of a "not-held/working" order by us shall be consistent with our efforts to seek to obtain a quality execution of such orders, considering all of the terms agreed to with you and the market conditions surrounding the order.

 

When handling your order, it shall be on a "net" basis unless otherwise instructed. This means that the reported price may reflect our compensation, including an imputed markup or markdown. When multiple executions are employed consistent with a client's "not held/working order" specification, the final price to you may reflect an "average price" plus or minus an imputed markup. Accordingly, we may act in the capacity of principal, riskless principal, or, in the event of multiple executions, more than one capacity. Of course, you may request detail on the individual executions at any time.

 

 

MARKET ON CLOSE ORDER POLICY

 

Madoff only accepts electronically delivered Listed and Nasdaq Market on Close (MOC) orders until 3:40:00 p.m. EST. After 3:40:00 p.m. EST, we will reject such orders as "not within eligible hours". Furthermore, any electronic cancellation requests for MOC orders received after 3:40:00 p.m. EST will be rejected as "not within eligible hours". Orders in Nasdaq securities will be priced based on the Nasdaq Official Closing Price (NOCP).

 

SPECIAL SETTLEMENT POLICY

 

The execution price for special settlement orders will automatically include a 3 cents per share markup for client buys and a 3 cents per share markdown for client sells.

 

 

SUB-PENNY ORDER POLICY

 

Rule 612 of Regulation NMS (effective January 31, 2006) prohibits market participants from displaying, ranking, or accepting quotations, orders or indications of interest in any NMS stock priced in an increment smaller than $0.01 if the quotation, order or indication of interest is priced greater than or equal to $1.00 per share.

 

In accordance with this rule, Madoff will reject all client orders priced in sub-pennies if the order price is greater than $1.00 per share. Madoff will accept orders priced in sub-pennies if the order price is less than $1, but such orders will be rounded to a penny increment for display purposes (client buy orders will be rounded down to the nearest penny, client sell orders will be rounded up to the nearest penny.)

 

AFFIRMATIVE DETERMINATION

 

In accordance with NASD Rule 3370, Madoff requires that all short sale client orders from firms that are not Nasdaq members must be accompanied by an indication that the non-member firm has performed the affirmative determination (confirmed that the security is available for delivery by settlement date, or confirmed that the security can be borrowed for delivery by the settlement date). Orders that are not accompanied by such an indication will be rejected. The indication that an affirmative determination has been made can be either electronic or verbal.

 

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SEC ORDER HANDLING RULES

 

Madoff’s systems and its procedures are designed to search out and provide a quality execution for all its clients’ orders. Madoff considers a quality execution to include opportunities for price improvement beyond the inside quote (National Best Bid and Offer). Madoff employs its own proprietary automation, the Madoff Integrated Support System (MISS), when seeking a quality execution. MISS considers all quotation information from National Market System (NMS) participants as well as readily accessible quotation information from qualified electronic communication networks (ECNs) that may be disseminated in the NMS.

 

Madoff’s automated systems have been designed and are continually enhanced to automatically provide the highest level of regulatory compliance and execution quality available. While Madoff’s automation provides a level of quality and consistency that would not otherwise be available in a manual environment, Madoff’s employees remain the cornerstone of our execution service.

 

Senior management, as well as trading, systems, and operations personnel are all aware of the significance of the SEC’s Order Handling Rules. Management meetings are held regularly to ensure that the firm is meeting its regulatory and competitive goals. Quality and consistency are rigorously monitored through Madoff’s on-line supervisory systems, which allow management to review each trade for its execution quality on a regular and continuous basis.

 

Under certain circumstances orders will be subjected to manual verification (i.e. locked and crossed markets), or clarification of the terms of the order (i.e. limit price, special instructions, etc.). In these instances the price at execution time may be different (favorable or unfavorable) from the price at receipt time.

[Guest LAW_*]

Let's look at this from the SEC's side

 

Securities and Exchange Commission Chairman Christopher Cox issued the following statement today concerning its ongoing investigation in the case of SEC v. Madoff:

 

Since the Commission first took emergency action against Bernard Madoff and his firm, Bernard L. Madoff Investment Securities, LLC on Thursday, December 11, every necessary resource at the SEC has been dedicated to pursuing the investigation, protecting customer assets and holding both Mr. Madoff and others who may have been involved accountable.

 

SEC investigators are currently working with the trustee and other law enforcement agencies to review vast amounts of records and information involving Mr. Madoff and his firm. Those records are increasingly exposing the complicated steps that Mr. Madoff took to deceive investors, the public and regulators. Although the information I can share regarding an ongoing investigation is limited, progress to date indicates that Mr. Madoff kept several sets of books and false documents, and provided false information involving his advisory activities to investors and to regulators.

 

Since Commissioners were first informed of the Madoff investigation last week, the Commission has met multiple times on an emergency basis to seek answers to the question of how Mr. Madoff's vast scheme remained undetected by regulators and law enforcement for so long. Our initial findings have been deeply troubling. The Commission has learned that credible and specific allegations regarding Mr. Madoff’s financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the Commission for action. I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them. Moreover, a consequence of the failure to seek a formal order of investigation from the Commission is that subpoena power was not used to obtain information, but rather the staff relied upon information voluntarily produced by Mr. Madoff and his firm.

 

In response, after consultation with the Commission, I have directed a full and immediate review of the past allegations regarding Mr. Madoff and his firm and the reasons they were not found credible, to be led by the SEC's Inspector General. The review will also cover the internal policies at the SEC governing when allegations such as those in this case should be raised to the Commission level, whether those policies were followed, and whether improvements to those policies are necessary. The investigation should also include all staff contact and relationships with the Madoff family and firm, and their impact, if any, on decisions by staff regarding the firm.

 

The Commission believes strongly that it is vital that SEC investigators, examiners, and enforcement staff be above reproach while conducting their duties, in order to ensure the integrity and effectiveness of the SEC. In addition to the foregoing investigation, I have therefore directed the mandatory recusal from the ongoing investigation of matters related to SEC v. Madoff of any SEC staff who have had more than insubstantial personal contacts with Mr. Madoff or his family, under guidance to be issued by the Office of the Ethics Counsel. These recusals will be in addition to those currently required by SEC rules and federal law.

[Guest Fed Up]

Looks like a Ponzi scheme to me. A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns to investors out of the money paid in by subsequent investors, rather than from the profit from any real business. It is named after Charles Ponzi. The term "Ponzi scheme" is used primarily in the United States, while other English-speaking countries do not distinguish in colloquial speech between this scheme and other forms of pyramid scheme.

 

The scheme usually offers abnormally high short-term returns in order to entice new investors. The perpetuation of the high returns that a Ponzi scheme advertises (and pays) requires an ever-increasing flow of money from investors in order to keep the scheme going.

 

The system is destined to collapse because there are little or no underlying earnings from the money received by the promoter. However, the scheme is often interrupted by legal authorities before it collapses, because a Ponzi scheme is suspected and/or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.

[Guest A Friend of Dusty]

Eric Swanson married Shana Madoff, a niece of Bernard L. Madoff and daughter of his brother, Peter Madoff, the firm’s chief compliance officer.

 

Eric Swanson currently works at BATS Exchange located in Kansas City, Kansas. BATS was founded in June 2005 in a time when market innovation and technology leadership were at risk due to over consolidation in the ECN and Exchange industry. Independent market centers were being bought up, and the number of credible places to trade were rapidly decreasing.

 

World Headquarters

(913) 815-7000

Fax: (913) 815-7119

info@batstrading.com

[Guest Ondo]

why isn’t Bernie Madoff in jail? $50 billion and he gets house arrest on bail? why are they treating this crook like a gentleman? If you were to embezzle $10 million from your employer, they’d set bail so high you could never get out.

[Guest Pephi]

If she (Shana) was a lawyer for the company and sat on advisory boards for regulatory practices and oversights, then how did she have a legal oversight of the own company she worked for? It sounds like she has a lot to do with this scam.

[Guest LAW_*]

Shana Diane Madoff, the daughter of Mr. and Mrs. Peter B. Madoff of Old Westbury, N.Y., was married last evening to Scott Ira Skoller, the son of Trina Skoller of Metairie, La. Rabbi Seth J. Sternstein performed the ceremony at the Pierre in New York. Shana and Scott didn’t last. And in 2006, she met Eric Swanson (U. of Minnesota, Hamline law), who worked at the SEC for 10 years, including as a senior inspections and examination official, before leaving in 2006

[Guest Thomas_*]

Congressman Paul E. Kanjorski (PA-11), the Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, today announced that he will convene a congressional inquiry in early January to examine the $50 billion investment swindle allegedly committed by Mr. Bernard L. Madoff. The proceedings of the Capital Markets Subcommittee will help to guide the work of the House Financial Services Committee in undertaking the most substantial rewrite of the laws governing the U.S. financial markets since the Great Depression.

 

"The news reports in recent days that Mr. Madoff stands at the center of a $50 billion Ponzi scheme are deeply disturbing. Unfortunately, these events have only further weakened already-battered investor confidence in our securities markets, and they have raised even more troubling questions about the effectiveness of our regulatory system," said Chairman Kanjorski. "These matters therefore demand expeditious and careful review by the Capital Markets Subcommittee. I have consistently stressed the need for pursuing comprehensive regulatory reform since 2000, and I have held hearings on the need to address this important issue. But, before we act on legislation in the 111th Congress to restructure the regulatory system for the financial services industry and enhance investor protection, we need to understand how Mr. Madoff organized his many business operations and how he perpetrated these frauds."

 

Chairman Kanjorski added, "We must also understand why the U.S. Securities and Exchange Commission, other regulators, and additional participants in the securities markets failed to detect these substantial evasions before innocent investors and charitable organizations were substantially harmed. The answers to these questions will inform the work of the House Financial Services Committee as it works next year to craft a strong, effective, modern regulatory system for the financial services industry."

 

The examination of the Madoff swindle will take place as soon as possible in January, once the 111th Congress begins its work. The new Congress is scheduled to convene on January 6, 2009.

[Guest August]

Look for J. Ezra Merkin and his Ascot Partners fund, which invested almost all its money with Madoff get indicted soon. The connections get larger.

 

BDO Seidman, LLP - auditor

Congregation Kehilath Jeshurun - investor

Emanuel and Riane Gruss Charitable Foundation - investor, investor

L Bravmann Foundation Inc. - investor, investor

MBZ 1996 Trust - investor

New York Law School - investor

New York Law School vs. J. Ezra Merkin and Ascot Partners - defendant

Ramaz School of Manhattan - investor

Robert M. Beren Foundation - investor, investor

Sapirstein Stone Weiss Foundation - investor

SAR Academy - investor

Yeshiva University - investor

 

J. Ezra Merkin chairman of lender GMAC Financial Services.

[Guest LAW_*]

GMAC is asking Merkin to step down.

 

GMAC Financial Services is a global finance company operating in and servicing North America, South America, Europe and Asia-Pacific. GMAC specializes in automotive finance, real estate finance, insurance, commercial finance and online banking. As of Dec. 31, 2007, the organization had $249 billion in assets and serviced 15 million customers. Visit the GMAC media site at www.media.gmacfs.com for more information.

[Guest ALWAYS RED_*]

Looks like the Democrats are going to have alot of explaining to do. Happy Holidays everyone!

 

 

http://www.opensecrets.org/news/2008/12/ma...pent-nearl.html

 

Madoff made a fortune, and he played politics with some of that money. In total, he and his wife, Ruth, have given $238,200 to federal candidates, parties and committees since 1991, with Democrats getting 88 percent of that. Overall, Madoff and other individuals at his company, Bernard L. Madoff Investment Securities, gave $372,100 in campaign contributions since 1991, with 89 percent to Democrats. The firm spent $590,000 on lobbying in the last 11 years, all but $10,000 of it with the lobbying firm of Lent, Scrivner & Roth. A search for funds with "Madoff" in their title in lawmakers' personal investments did not find any members of Congress with their own funds invested with him.

 

The following party committees, PACs and current members of Congress have received contributions from Madoff and his wife since the 1992 election cycle:

 

Democratic Senatorial Campaign Cmte D $102,000

 

Securities Industry Assn $31,000

 

Wyden, Ron - D $13,000

 

Schumer, Charles E - D $12,000

 

Markey, Edward J - D $10,000

 

Securities Industry & Financial Mkt Assn - $10,000

 

Lautenberg, Frank R - D $8,600

 

Merkley, Jeff - D $2,300

 

Clinton, Hillary - D $2,000

 

Rangel, Charles B - D $2,000

 

Towns, Edolphus - D $2,000

 

Dodd, Christopher J - D $1,500

 

Ackerman, Gary - D $1,200

 

Dingell, John D - D $1,000

 

Obey, David R - D $1,000

 

Matheson, Jim - D $250

 

National Abortion Rights Action League - $250

[Guest Banker]

why isn’t Bernie Madoff in jail? $50 billion and he gets house arrest on bail? why are they treating this crook like a gentleman? If you were to embezzle $10 million from your employer, they’d set bail so high you could never get out.

 

50 billion is just a conservative number. People in my industry are saying the number should be more like 300 Billion.

[Luke_Wilbur]

I think we will never know the complete amount. Madoff pressured his investors to never reveal they had money with him. It really is amazing how this scam lasted so long.

 

United States v. Bernard L. Madoff

U.S. v. Bernard L. Madoff, 08 Mag. 2735. On December 11, 2008, Bernard L. Madoff was arrested on a criminal complaint alleging one count of securities fraud. On December 11, 2008, the Securities and Exchange Commission brought a civil action against Mr. Madoff, and filed a motion to freeze certain assets and to appoint a receiver. On December 12, 2008, U.S. District Judge Louis L. Stanton entered an order: (1) appointing a receiver (Lee S. Richards, Esq.) over Bernard L. Madoff Investment Securities LLC, Madoff Securities International Ltd., and Madoff Ltd.; and (2) freezing certain corporate and personal assets. On December 15, 2008, a trustee (Irving H. Picard, Esq.) was appointed for the liquidation of Bernard L. Madoff Investment Securities LLC, pursuant to the Securities Investor Protection Act of 1970. At the moment, we understand that the receiver will be posting information about its activities at www.madoff.com, and the trustee will be posting information about its activities at www.sipc.org. Investors and/or victims should consult those websites for additional information.

 

Investors are requested to gather any documents that they have concerning their investments with Mr. Madoff and his companies, and to regularly check this website, the receiver's website, the trustee's website, and the SEC website (www.sec.gov) for information about developments in this investigation and further instructions on how to provide information to the pertinent authorities.

 

In addition, the FBI has set up a hot line number, (212) 384-2359, for victims to call and leave their contact information.

 

We know that investors are anxious to learn whatever they can about the status of their investments and the assets of the Madoff companies. Although we cannot provide further details at this time, please be assured that all those involved are working diligently to investigate this matter and to locate and preserve assets that can be used for restitution to defrauded investors.

Edited December 19, 2008 by Luke_Wilbur

[Guest DC Government Worker]

The Federal Bureau of Investigation Thursday urged the victims of US financier Bernard Madoff's 50 billion dollar Wall Street scam to come forward and tell their story to federal police.

 

"If you believe that you have been a financial fraud victim in the Bernard L. Madoff matter, please contact us," the FBI said in a statement.

 

The bureau asked any potential fraud victims to email the FBI office at the following address: fbi@service.govdelivery.com.

[Guest MassMutual]

Massachusetts Mutual Life Insurance Company (MassMutual) stated today that Tremont Group Holdings, Inc. (Tremont) is a subsidiary of Oppenheimer Acquisition Corporation, which is a subsidiary of Massachusetts Mutual Life Insurance Company (MassMutual). Rye Investment Management (Rye) is an affiliate of Tremont Group Holdings.

 

MassMutual has very limited exposure to the alleged fraud by Bernard L. Madoff. MassMutual is carefully assessing the situation and believes that any adverse impact would be immaterial to its strong financial condition.

 

Although our review is continuing, MassMutual currently believes its indirect exposure in Madoff managed funds is less than $10 million. In addition, the carrying value of Tremont to Oppenheimer represents approximately 0.03% of MassMutual's statutory assets, excluding separate accounts, as of September 2008 ($85,495 million). To the very limited extent that any MassMutual client funds are exposed, we will take appropriate action to protect our clients' interests.

 

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual and its subsidiaries had more than $500 billion in assets under management at year-end 2007. Assets under management include assets and certain external investment funds managed by MassMutual's subsidiaries.

 

Founded in 1851, MassMutual is a mutually owned financial protection, accumulation and income management company headquartered in Springfield, Mass. MassMutual's major affiliates include: OppenheimerFunds, Inc.; Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MML Investors Services, Inc., member FINRA and SIPC ( www.finra.org and www.sipc.org); MassMutual International LLC and The MassMutual Trust Company, FSB.

 

Contacts:

 

Jim Lacey

413-744-2365

 

Mark Cybulski

413-744-5427

[Guest LAW_*]

Damage from the alleged scams is so widespread the IRS is likely to issue special guidance on how taxpayers should respond.

[Guest Banker]

Taxpayers can deduct some losses that result from theft in the year in which they were sustained, under Sec. 165(a) of the Internal Revenue Code.

[Luke_Wilbur]

The SEC case is SEC v. Madoff, 08-10791, U.S. District Court, Southern District of New York (Manhattan). The criminal case is U.S. v. Madoff, 08-mag-2735, U.S. District Court, Southern District of New York (Manhattan).

[Guest SIPC]

LIQUIDATION PROCEEDING FOR BERNARD L. MADOFF INVESTMENT SECURITIES LLC UNDERTAKEN BY SECURITIES INVESTOR PROTECTION CORPORATION

 

Trustee Appointed By Court; SIPC Taking Action to Protect Customer Assets.

 

WASHINGTON, D.C. – The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, announced today that it is liquidating Bernard L. Madoff Investment Securities LLC of New York, NY, under the Securities Investor Protection Act (SIPA).

 

SIPC today filed an application with the United States District Court for the Southern District of New York for a declaration that the customers of Bernard L. Madoff Investment Securities LLC are in need of the protections available under the SIPA. The United States District Court for the Southern District of New York granted the application and appointed Irving H. Picard as trustee for the liquidation of the brokerage firm, and further appointed the law firm of Baker & Hostetler LLP as counsel to Mr. Picard.

 

SIPC President and CEO Stephen Harbeck said: "Upon information provided by the United States Securities and Exchange Commission and the Financial Industry Regulatory Authority, it is clear that the customers of the Madoff firm need the protections available under federal law. Mr. Picard has served as trustee in more brokerage firm liquidations than any other individual. SIPC and the trustee are dedicated to returning assets to customers as promptly as possible."

 

Mr. Harbeck cautioned, however, that the scope of the misappropriation and the state of the defunct firm's records will make this more difficult than in most prior brokerage firm insolvencies. "It is unlikely that SIPC and the Trustee will be able to transfer the customer accounts of the firm to a solvent brokerage firm. The state of the firm's records may preclude a transfer of customer accounts. Also, because the size of the misappropriation has not yet been established, it is impossible to determine each customer's pro rata share of ‘customer property'."

 

The trustee is charged with giving notice of the proceeding and mailing claim forms to the customers and other creditors of the firm. Information about the case also will be made available on the Web at www.sipc.org.

 

Mr. Picard stated that he is acutely aware of the concern of investors who have been caught up in this financial scandal. "I will work with SIPC to do what the law allows to ameliorate the losses to customers

 

About SIPC

 

The Securities Investor Protection Corporation is the U.S. investor's first line of defense in the event a brokerage firm fails, owing customer cash and securities that are missing from customer accounts. SIPC either acts as trustee or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds.

 

The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities - such as stocks or bonds -- that are already registered in their names or in the process of being registered. At the same time, funds from the SIPC reserve are available to satisfy the remaining claims of each customer up to a maximum of $500,000. This figure includes a maximum of $100,000 on claims for cash. From the time Congress created it in 1970 through December 2007, SIPC has advanced $507 million in order to make possible the recovery of $15.7 billion in assets for an estimated 626,000 investors.

 

For more information about SIPC, see "The Investor's Guide to Brokerage Firm Liquidations" at http://www.sipc.org/pdf/SIPC_brochure_Inve...iquidations.pdf.

 

CONTACT: Ailis Aaron Wolf, for SIPC, (703) 276-3265, or aaaron@hastingsgroup.com. All investor inquiries of SIPC should be directed to asksipc@sipc.org or (202) 371-8300.

[Guest LAW_*]

U.S. Attorney General Michael Mukasey has recused himself from the Justice Department’s investigation into Madoff’s alleged fraud, a department spokesman said today.

 

Michael Mukasey is a 1959 graduate of the Ramaz School, a modern Orthodox Jewish school in New York that invested as much as $6 million in a fund that invested with Madoff.

 

Attorney General Mukasey's son, Marc L. Mukasey, is a partner at Bracewell & Giuliani in New York. Marc L. Mukasey is representing Frank DiPascali, the top financial officer of Bernard L. Madoff Investment Securities LLC

 

http://www.bracewellgiuliani.com/index.cfm...arc_Mukasey.cfm

 

Partner

New York

T: 212.508.6134

F: 212.938.3833

E: marc.mukasey@bgllp.com

Washington, D.C. Assistant

Laura Barr

212.508.6100

 

Marc L. Mukasey is the leader of the firm's White Collar Criminal Defense and Special Investigations practice. He represents corporations and individuals facing allegations of securities fraud, antitrust violations, environmental crimes, money laundering, bribery, mail/wire fraud, tax offenses, embezzlement, and other business crimes. Mr. Mukasey also conducts internal investigation work on behalf of corporate clients. His internal investigation work has been noted in The Wall Street Journal and Business Week Online.

 

Mr. Mukasey's clients frequently retain him for his trial skills. He has tried numerous criminal cases involving allegations of securities fraud, investment advisory fraud, mail and wire fraud, insider trading, money laundering, RICO and murder. He has also practiced extensively before the U.S. Court of Appeals for the Second Circuit. Recently, Mr. Mukasey has been successful in persuading Department of Justice prosecutors to close an antitrust investigation against a major corporation without the filing of charges, and to drop securities fraud and mail fraud investigations of his business clients.

 

Prior to joining Bracewell, Mr. Mukasey served for eight years in the U.S. Attorney's Office for the Southern District of New York, where he held supervisory positions as a Unit Chief and Deputy Chief Appellate Attorney. In 2003 and 2005, he received the Justice Department's award for Superior Performance by an Assistant U.S. Attorney. From 1993 through 1996, Mr. Mukasey served as a staff attorney at the Securities and Exchange Commission, where he prosecuted a full range of securities law violations. He also served as a law clerk to the Honorable I. Leo Glasser of the U.S. District Court for the Eastern District of New York.

 

Mr. Mukasey is a frequent commentator on criminal justice issues on television and in major newspapers, and is a lecturer on criminal procedure and trial advocacy.

 

Publications and Speeches

"A Company's Exposure: Civil and Criminal Liabilities from Identity Theft, Computer Piracy, Healthcare Issues, and Immigration," South Texas School of Law, Houston, TX, July 31, 2008.

 

"How to Use Effective Graphics at Trial," Commercial Litigation Issues for the 21st Century, Manchester, VT, May 2-4, 2008.

 

Keynote Speaker, Global Distressed Investing Summit, New York, NY, January 28-29, 2008.

 

"Direct and Cross-Examination," U.S. Attorney's Office Lecture Series, 2003, 2004, 2005.

 

U.S. Attorney's Office Trial Advocacy Program, 2002-2005.

 

Intensive Trial Advocacy Program, Benjamin N. Cardozo School of Law, 2001, 2004, 2005.

 

Federal Sentencing Guidelines Seminar, New York State Bar Association, Fall 2005.

 

"The ABC's of Federal Criminal Litigation," Association of the Bar of the City of New York, Continuing Legal Education Program, New York, April 2003.

 

Education

J.D., ejaculate laude, Benjamin N. Cardozo School of Law, 1993

B.A., Dartmouth College, 1989

 

 

Bar Admissions

New York

 

 

Court Admissions

U.S. Court of Appeals for the 2nd Circuit

U.S. District Court for the Southern and Eastern Districts of New York

 

 

Noteworthy

New York Super Lawyer

Benchmark Litigation 2008, the Guide to America's Leading Litigation Firms and Attorneys

[Guest Look at this]

Company Madoff Securities International Limited

Overview

Address Head Office

Madoff Securities International Limited

12 Berkeley Street

London

Postcode W1J 8DT

Telephone 020 7493 6111

[Karl Rudder]

I am shocked that Madoff wasn't ever caught before making off with $50 billion dollars!

Those responsible for not having caught him earlier need to face a few charges of fraud.

[Guest No Doubt]

I think this is way bigger than most people realize. I smell coverup.