Madoff gets 150 years in prison!

[KRonn]

I certainly think that the Three-card Monte guys on the street should be punished for what they do to tourists, but I have a hard time feeling sorry for the marks. My main objection to the dealers is that they look like Eastern Europe trash (which they are) and smell bad.

I expect a guy investing $100 million to be a LOT more careful to check out stuff than a gullible tourist investing $100. Anything else would be insulting to him.

I think the investors did check out, perform due diligence, on Madoff's firm. I've seen some reports that people did that. What ever the case, as much as we want to scorn them, they didn't deserve to be robbed and scammed.

As for investing. Does anyone do any investing? I'm sure you do. Money market funds, stocks, maybe an investment firm like Fidelity, Paine Webber, or with your company retirement account, or what ever? It's common. What isn't so common is probably investing with someone like a Madoff company, but I don't know; I think there are a lot of firms that handle investing like that, as the middle men type corporation.

I guess Madoff isn't eligible for a more cushy type Federal prison, the "country club" ones for short sentence white collar crime. He's going to an austere prison, not hard labor or anything like that, but to a medium or maximum security prison.

[alfred russel]

I think the investors did check out, perform due diligence, on Madoff's firm. I've seen some reports that people did that. What ever the case, as much as we want to scorn them, they didn't deserve to be robbed and scammed.

If you ask them, of course many will say they did due diligence. The reality is that this guy didn't have a real audit or real financial statements and refused to disclose specifics of his business plan. His returns also defied common sense. Any reasonable level of due diligence would have caused someone to walk away.

Does that mean what he did wasn't very bad? Nope--and I think he deserves his jail term. Does that mean I don't have some sympathy for the people who lost money (I suspect almost all of which were millionaires)? The answer is no once more. But I'm going to reserve much more sympathy for those that suffered worse fates and had less responsibility for their own downfall--like the plane crash victims today.

[Jos Theelen]

You're not going far enough.  Martinus is a moron himself for dealing with them.  In fact, Martinus is a moron in any event, but you should show more audacity in your attacks on him.

Oh, fuck off





(you mean something like this?)

Too simple.  Use what you know about the person against them.

Difficult. The only thing I know that he seems to be a nice guy. And because Poland just joined the EU, I cannot say nasty things about Polaks.

[Neil]

You're not going far enough.  Martinus is a moron himself for dealing with them.  In fact, Martinus is a moron in any event, but you should show more audacity in your attacks on him.

Oh, fuck off





(you mean something like this?)

Too simple.  Use what you know about the person against them.

Difficult. The only thing I know that he seems to be a nice guy. And because Poland just joined the EU, I cannot say nasty things about Polaks.

You can hit him in his anti-semitism, his homosexuality, his fanaticism or the fact that he pretends to be a lawyer.  However, Martinus also sees himself as a sophisticate and as an enlightened person amongst a mass of ignorant Poles, so if you attack him as provincial and as a low-grade Russian, it should get a result.

[KRonn]

Interesting article on the SEC investigating Madoff's firm. Seems an investigator had some suspicions but not enough to really pursue things. Then as the SEC was under pressure to investigate other matters the Madoff case was put on the back burner. Also, another SEC official looking into the case later married Madoff's niece but was not in the relationship while he was working on the case.


http://www.msnbc.msn.com/id/31702178/ns/business-washington_post/

[size]SEC lawyer issued Madoff warning in 2004
Investigator raised alarm about irregularities but was pointed elsewhere

An investigator at the Securities and Exchange Commission warned superiors as far back as 2004 about irregularities at Bernard L. Madoff's financial management firm, but she was told to focus on an unrelated matter, according to agency documents and sources familiar with the investigation.

Genevievette Walker-Lightfoot, a lawyer in the SEC's Office of Compliance Inspections and Examinations, sent e-mails to a supervisor, saying information provided by Madoff during her review didn't add up and suggesting a set of questions to ask his firm, documents show. Several of these questions directly challenged Madoff activities that much later turned out to be elements of his massive fraud.

But with the agency under pressure to look for wrongdoing in the mutual fund industry, she wasn't able to continue pursuing Madoff, according to documents and two people familiar with the investigation, and her team soon concluded its work on the probe.

Walker-Lightfoot's supervisors on the case were Mark Donohue, then a branch chief in her department, and his boss, Eric Swanson, an assistant director of the department, said two people familiar with the investigation. Swanson later married Madoff's niece, and their relationship is now under review by the agency's inspector general, who is examining the SEC's handling of the Madoff case.

Madoff confessed in December to running "a giant Ponzi scheme" worth potentially $50 billion, and he was sentenced Monday to 150 years in prison after victims told a judge about how Madoff had destroyed their lives. Authorities are continuing to investigate other people and firms that might have abetted the fraud.

The SEC's inability to detect Madoff's fraud was a high-profile embarrassment for the agency, which was already under scrutiny for the collapse of investment banks under its watch, helping fuel the financial crisis. SEC Chairman Mary L. Schapiro, who took over shortly after the Madoff case came to light, has acknowledged that the agency's performance was a failure, saying the SEC needed to improve enforcement and its surveillance of financial markets.

At least five times over nearly 20 years, the SEC has investigated Madoff's business, but it never discovered the tremendous fraud. In 2007, for instance, the agency reviewed his activities after warnings from a one-time rival, Harry Markopolos, that Madoff was probably running a Ponzi scheme.

Three years before, in early 2004, Walker-Lightfoot was assigned to examine Madoff's relationship with various hedge funds. The SEC suspected that Madoff may have been allowing the funds to trade ahead of his own trades, which would give them an unfair advantage.

The agency asked Madoff to turn over reams of information — accounting statements, trade confirmations and other documents — and told him to detail his strategy, called "split-strike conversion." Madoff told the SEC that he used sophisticated trading practices to buy and sell stocks, employing stock options as hedges to limit losses. He told investors he never lost money.

Inconsistencies
Walker-Lightfoot, a staff lawyer, had previously worked at the American Stock Exchange, where she developed an expertise in specialized trading strategies. When she reviewed the paper documents and electronic data supplied by Madoff, she found it full of inconsistencies, according to documents, a former SEC official and another person knowledgeable about the 2004 investigation.

For example, the standard industry practice was that a firm buying a security must pay for it — or "settle" — within three days. But Madoff's settlements were erratic. Sometimes he settled only a day later after the purchase, sometimes seven days later.

She was also focused on his claim that he was using the same strategy for all his investors, which would involve trading stocks and hedges at the same time. On review, he seemed to be following different approaches on different accounts.

Her concerns would later prove to be on the mark. Earlier this year, the Justice Department accused Madoff of fabricating his strategy, generating false account statements and trade confirmations, and lying to investigators.

   
INTERACTIVE
Rich folks, behaving badly
   
A rogues' gallery
A look at characters caught up in famous financial scandals.

In early March 2004, Walker-Lightfoot shared her concerns with her supervisors, said a former SEC official and another person aware of the conversation.

Donohue, who still works for the SEC, was not available to comment for this article, an agency spokesman said. Swanson, no longer with the agency, declined to comment.

In response to Walker-Lightfoot's concerns, Donohue asked her to describe what additional information she wanted from Madoff, a person familiar with the discussion said.

So she sent Donohue an e-mail with nine follow-up questions she wanted to ask Madoff's firm, documents show. Several focused on the unusual trading patterns she had noticed. Others touched more broadly on questions about how Madoff ran his business.

"Do you hold any other form of brokerage account statements or accounting documents for these accounts?" Walker-Lightfoot asked. "Do you have the prime brokerage or custodial banking agreements for these accounts?"

Click for related content
Trustee: $231 million so far for Madoff victims
Source: 10 more will be charged in Madoff scam
  Cartoonists' take on the sad situation

If pursued, these questions may have led to discovery of the fraud. That's because Madoff was in fact maintaining personal custody of investors' assets, unlike the practice followed by many investment companies. These firms use a third-party custodian to hold investors' funds, and that helps assure investors that their funds are where the companies say they are.

In a separate e-mail to Donohue later in March, Walker-Lightfoot put some of her suspicions in writing.

For instance, documents show, she detailed her findings on two accounts at Madoff's firm. One belonged to a hedge fund called Tremont and the other to a smaller hedge fund called Sway.

Madoff had told the SEC that all his accounts traded based on the same specific conditions. But in her e-mail, which she copied to colleague Jacqueline Wood, Walker-Lightfoot noted "significant differences between the Tremont and Sway account transactions." The variation in the dates of trades seemed to contradict a key part of his strategy and "does not make sense," she wrote.

She also flagged other doubts about Madoff's strategy. He was supposed to buy and sell stocks and then trade options as a hedge against any loss. But his financial records suggested that he often completed trades without the corresponding hedges or hedged without completing the corresponding trades. As she wrote, "the corresponding equity activity/or hedge restructuring" didn't occur. In reality, the later criminal complaint said, many of the trades never happened at all.

....

[DontSayBanana]

Interesting article on the SEC investigating Madoff's firm. Seems an investigator had some suspicions but not enough to really pursue things. Then as the SEC was under pressure to investigate other matters the Madoff case was put on the back burner. Also, another SEC official looking into the case later married Madoff's niece but was not in the relationship while he was working on the case.


http://www.msnbc.msn.com/id/31702178/ns/business-washington_post/

A bit of an understatement.

Saw that earlier as well, for those adverse to reading articles, a woman tried to raise some flags in 2004, but was ordered to drop it by her supervisor, who ended up married to Madoff's niece. No claims about whether or not they were in a relationship at the time the investigator was ordered off the case.

[The Brain]

Love and money is a wonderful mix.

[Caliga]

Lawsuit: Madoff's New Friends Include Druggie, Child Molester
Victims' Lawyer Lets Loose on Madoff Sons, Brother and KPMG
By RHONDA SCHWARTZ and ANNA SCHECTER
Oct. 21, 2009 

Convicted con man Bernard Madoff, who slept on luxury linens and dined at the finest restaurants, is now sleeping in the lower bunk of a two man cell in a federal prison, with a 21-year-old convicted drug dealer for a roommate and a child molester cooking his pizza, according to a new victims' lawsuit filed by the lone outsider to visit him behind bars.

In his first prison interview, a buff-looking Bernie Madoff said he couldn't believe he got away with his massive Ponzi scheme for so long.

San Francisco attorney Joe Cotchett says the former billionaire now spends time with former Colombo crime family boss Carmine Persico and convicted Israeli spy Jonathan Pollard, amid a gang of fellow inmates in prison for drug and sex crimes.

Madoff should feel comfortable among the former drug dealers given his long association with office messengers who provided him and his wife Ruth with large amounts of marijuana over the years, according to accounts by former employee in a new book by ABC's Brian Ross, "The Madoff Chronicles."

As the former Madoff staffers told Ross, Bernie liked to let off steam.

"Especially in the early days, a messenger known in the office as Little Rick would be dispatched to Harlem to bring back marijuana for Bernie and others in the office."

"Little Rick ended up losing his job in 2003 when he couldn't kick his own problem with cocaine and drugs were discovered in his desk. He says he wasn't the only one with a problem at the Madoff firm. "There was white powder all over that office. It was like the freaking North Pole," Little Rick said. "Are you freaking kidding me?"

And as the firm grew, as reported by Ross in the "Chronicles," Bernie liked wild times at office parties.

"At one Christmas Party, Bernie rented out the entire floor of the disco New York, New York, and there were topless waitresses and waiters in just g-strings," said Little Rick.

The lawsuit also brings new accusations against KPMG, a prestigious "Big 4" accounting firm, responsible for so-called independent audits of a several of the largest of Madoff's U.S. "feeder funds," as well as Madoff's London office.

The lawsuit alleges there is "substantial evidence that KPMG either knew or failed to disclose or failed to detect" the massive Ponzi scheme.

And in particular, the suit questions the role of David Yim, a director in KPMG's London office, whose cell phone number was found in Madoff's personal address book and who was one of the auditors assigned to Madoff's London operation, according to the lawsuit.

"Either Yim knew or was willfully blind to the blatant fraud occurring. Yim was in constant contact with Madoff and his phone number was in Madoff's directory of key contact information."

I'm beginning to like this guy. 

[KRonn]

It just keeps on getting better and better with this guy and his investment firm from Hades. I wonder how the investigations are going into what some of the other higher ranking officials knew or were involved in?

[Neil]

So what exactly is this lawsuit trying to prove?  The guy is convicted, there's no money for them to take.  Are they trying to rip off the accounting firm or something?

[KRonn]

I'm glad a lawsuit is going forward. As far as I know, also the Feds and State authorities are continuing to probe into all this. It couldn't have just been Mad-dog who was in on this. His sons and business partners had to know something, some likely involved. And the other firms doing the accounting should have found something, but unless involved criminally I guess the suit can only be brought against them for incompetence or some such.