Madoff investment scandal

District Judge Laura Taylor Swain, a calm, thoughtful presence on the bench, has not yet said for sure whether the salacious allegations can be aired in the courtroom.

She's never done television before. 

My son hasn't read it, but he has been very loving and very, very supportive.

Hadassah Charity 

But the affair shows the need for the government to enforce its rules better, rather than write new ones, argues Robert Van Grover of Seward & Kissel, a law firm. Mr Madoff's investment business was overseen by the Securities and Exchange Commission (SEC), but it failed to carry out any examinations despite receiving complaints from investors .

It was almost like the infidelities gave her the spine to do what she knew she needed to do to save her family, which was cut Bernie off," Henriques added. Henriques reported Sunday in The New York Times that the woman who fell in love with Bernie Madoff at age 13 eventually changed her phone number and completely cut all connections with her imprisoned husband to save her family.

The two, Henriques said, haven't spoken since their son, Mark Madoff, committed suicide in Dec. However, when asked during a "60 Minutes" interview that aired Sunday night why she hasn't divorced him, Ruth Madoff replied, "I don't know. It doesn't matter to me -- he's gonna die in prison. I certainly don't want to find another man these days.

Are you concerned about It's something that happened 16 years ago. The unflattering physical comments you made about him have drawn quite a bit of attention. Why did you decide to focus on that?

In the months following the scandal breaking, I got a lot of questions about what made Bernie tick. I started doing some research, and it can impact the psyche from a very early age.

I really did feel that this was a part of Bernie's makeup, a big part of his psyche. So you think that was one of the main reasons he did the scam? I think it started with feelings of inadequacy, his inability to accept failure, his fear of failure. Can you briefly outline how you met and how your relationship developed? We met through business. That's how we met and how Bernie was introduced to Hadassah.

Bienes began his career working as an accountant for Madoff's father-in-law, Saul Alpern. Then, he became a partner in the accounting firm Alpern, Avellino and Bienes. In , the firm began advising its clients about investing all of their money with a mystery man, a highly successful and controversial figure on Wall Street—but until this episode, not known as an ace money manager—Madoff.

In a report to the SEC they mentioned the fund's "curiously steady" yearly returns to investors of However, the SEC did not look any more deeply into the matter, and never publicly referred to Madoff. Avellino complained to the presiding Federal Judge, John E. Regulators feared it all might be just a huge scam. They took in nearly a half a billion dollars in investor money, totally outside the system that we can monitor and regulate. In a interview after the scam had been exposed, he said, "Doubt Bernie Madoff?

You can doubt God, but you don't doubt Bernie. He had that aura about him. Madoff was registered as a broker-dealer , but doing business as an asset manager. In September Madoff agreed to register his business, but the SEC kept its findings confidential. This investigation resulted in neither a finding of fraud, nor a referral to the SEC Commissioners for legal action.

A year earlier, Rampart had found out that Access International Advisors , one of its trading partners, had significant investments with Madoff. Markopolos' bosses at Rampart asked him to design a product that could replicate Madoff's returns.

After four hours of trying and failing to replicate Madoff's returns, Markopolos concluded Madoff was a fraud. He told the SEC that based on his analysis of Madoff's returns, it was mathematically impossible for Madoff to deliver them using the strategies he claimed to use.

In his view, there were only two ways to explain the figures—either Madoff was front running his order flow, or his wealth management business was a massive Ponzi scheme. This submission, along with three others, passed with no substantive action from the SEC.

The culmination of Markopolos' analysis was his third submission, a detailed page memo entitled The World's Largest Hedge Fund is a Fraud. The biggest red flag was that Madoff reported only seven losing months during this time, and those losses were statistically insignificant.

This produced a return stream that rose steadily upward at a nearly-perfect degree angle. Markopolos argued that the markets were far too volatile even under the best of conditions for this to be possible, a fact that would have been clear to anyone who understood the underlying math.

He's organized this business as a 'hedge fund of funds ' privately labeling their own hedge funds which Bernie Madoff secretly runs for them using a split-strike conversion strategy getting paid only trading commissions which are not disclosed. If this is not a regulatory dodge, I do not know what is.

She reported that "Madoff's investors rave about his performance — even though they don't understand how he does it. When high-volume investors who were considering participation wanted to review Madoff's records for purposes of due diligence , he refused, convincing them of his desire that proprietary strategies remain confidential. Madoff rejected any call for an outside audit "for reasons of secrecy", claiming that was the exclusive responsibility of his brother, Peter, the company's chief compliance officer ".

Friehling , a close Madoff family friend. Friehling was also an investor in Madoff's fund, which was seen as a blatant conflict of interest. This arrangement allows outside investigators to verify the holdings. Madoff's firm was its own broker-dealer and allegedly processed all of its trades. In , Joe Aaron, a hedge-fund professional, also found the structure suspicious and warned a colleague to avoid investing in the fund, "Why would a good businessman work his magic for pennies on the dollar?

And only if Madoff was assumed to be responsible for all the options traded in the most liquid strike price. Gradante , co-founder of hedge-fund research firm Hennessee Group, observed that Madoff "only had five down months since ", [88] and commented on Madoff's investment performance: Madoff had previously come close to collapse in the second half of after Bayou Group , a group of hedge funds, was exposed as a Ponzi scheme that used a bogus accounting firm to misrepresent its performance.

Madoff only survived by moving money from his broker-dealer's account into his Ponzi scheme account. By then, at least two major banks were no longer willing to lend money to their customers to invest it with Madoff. To Markopolos' mind, Madoff was running out of cash and needed to increase his promised returns to keep the scheme going.


There was an error trying to load your rating for this title. 

It was more like, "Surprise, I had an affair 15 or 16 years ago." We've really worked hard on our marriage since then, and things have come around, but this really terrible thing .

Aug 18,  · Bernie Madoff may have been the biggest con man in history. In the sack, not so much. In a new book, Madoff's married mistress gets some very public revenge on the old lover who swooned her with one hand and stole her money with the other. In the mids, Bernard Madoff tapped money from Jewish businessmen at exclusive country clubs with the promise of steady guaranteed returns on their investments. He then set his sights on Europe and Latin America, brokering deals with powerful hedge fund managers and feeder funds from Buenos Aires to Geneva. 

More Info

Popular on CBS News

Bernie Madoff was a sexist, egomaniacal, short-tempered control freak—yet everybody loved him. That is according to his secretary of more than 20 years, Eleanor Squillari, who co-authored a 9,word article in the June issue of Vanity Fair (click here for the complete article). The roles played by imprisoned Bernie Madoff's long-time secretary and subordinate staff during his decades-long fraudulent deals and alleged office .

Most recently, Madoff's accountant and lawyer is also facing up to 30 years in prison for his role. There are several other notable Ponzi schemes in history, including Allen Stanford's which stole $8 billion and Tom Petters' that cheated investors out of $ billion. But as far as scale goes, Madoff wins by a landslide. Aug 14,  · Ruth Madoff, who has been married to Mr. Madoff for almost 50 years, knew nothing about the “alleged affair,” said Peter Chavkin, her lawyer.

More Info
© 2018