Madoff’s Ponzi Scheme
Christopher Cox just cannotwait to get out of office at the SEC. While Bernard Madoff’s ponzi scheme was going on far longer than he was in tenure in Washington, it looks bad for him to be head commish when it blew up.
For those that are just joining, a ponzi scheme, in simple terms is when someone buys and sells shares with unrealistic returns using later funds to pay earlier investors. Check out the link to get more background.
If this is such an old method to illegally make money, how in this day and age did this occur? Was no one paying attention? The short answer is yes.
Harry Markopolos has been trumpeting from anything he can stand on since 1999 that this was going on. Now that the final tab has amounted to $50 Billion dollars, he is seen somewhat as a prophet. He was assigned to do competitive research on Bernard L. Madoff investment Securities and became curious when he saw the competitor having far better returns. He complained to the SEC’s Boston office in May 1999.
No major league baseball hitter bats .960, no NFL team has ever gone 96 wins and only 4 losses over a 100 game span, and you can bet everything you own that no money manager is up 96% of the months either,” he said.
Now things are getting more spicy as the U.S. Attorney General (Michael Mukasey) removed himself from the probe, and the SEC is looking into the relationship between Madoff’s niece and a former SEC attorney who reviewed Madoff’s business.
The Securities Investor Protection Corp. announced today that it is liquidating Madoff’s brokerage and named Irving Picard, a lawyer at Gibbons PC in New York, trustee to return cash and securities to customers. While the Washington-based SIPC provides as much as $500,000 in insurance for any missing money in individual brokerage accounts, it does not protect against investment losses.
[Edit: As stated on SIPC's website, there is no claim form "yet" for making a Madoff claim.]
In New York, Madoff showed up at the federal courthouse to sign some papers in his case, wearing a baseball cap and walking silently past a reporter who asked Madoff whether he had anything to say to his alleged victims. Free on $10 million bail, Madoff now has a curfew and an ankle-bracelet to monitor his movements.
Related articles you might be interested in:
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader or email.
Comments
No comments yet.
Leave a comment