A Securities and Exchange Commission (SEC) investigator claims to have warned her superiors in 2004 about concerns she had with Bernard Madoff’s financial management firm, said the Washington Post. Attorney Genevievette Walker-Lightfoot, with the SEC’s Office of Compliance Inspections and Examinations, was told to work on another issue, said the Post, citing SEC documents and its sources. Walker-Lightfoot worked at the American Stock Exchange, gaining proficiency in “specialized trading strategies,” the Post added.

Walker-Lightfoot was assigned to examine Madoff’s relationship with various hedge funds when the SEC was concerned he was allowing those funds to trade before his, enabling an unethical lead, said the Post. She sent emails to a supervisor about her concerns with the disgraced financer’s activities and developed some questions to ask his firm, reported the Post, which said some questions confronted some of Madoff’s actions, which were later connected to his historic Ponzi scheme. For instance, Walker-Lightfoot discovered a number of variations such as Madoff’s inconsistent settling practices, something counter to what Madoff, himself, documented he was doing. (more…)

After months of waiting, media outlets worldwide report that disgraced financier and Ponzi scheme mastermind, Bernard Madoff, has been sentenced to 150 years in prison for swindling scores of investors out of about $65 billion. Lev L. Dassin, the Acting U.S. Attorney for the Southern District of New York, and Joseph M. Demarest, Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (FBI), announced that Madoff was sentenced in Manhattan federal court.

U.S. District Judge Denny Chin, in sentencing Madoff, stated, “Objectively speaking, the fraud was staggering”; “the breach of trust was massive.” Chin described Madoff’s crimes as “extraordinarily evil” and said Madoff’s was “not merely a bloodless crime that takes place on paper but one that takes a staggering human toll. No other white collar case is comparable in terms of the scope, duration and enormity of the fraud and the degree of the betrayal.” (more…)

A group of Bernard Madoff’s victims who waived some of their rights in order to receive accelerated payments from the trustee liquidating his assets are having second thoughts. According to Bloomberg.com, they are asking a federal bankruptcy judge to invalidate the releases they signed so that they can seek more money if it is found that the trustee miscalculated their claims.

According to Bloomberg.com, this is the same group of Madoff victims who sued the trustee earlier this month in an attempt to force him to recalculate reimbursements. As we reported previously, trustee Irving Picard is currently calculating an investor’s loss as the difference between the total amount a customer paid into the scam and the total amount withdrawn before it collapsed. This group has argued that investors should receive credit for the full value of the securities shown on the last account statements they received before Madoff’s arrest. If they win, the amount due to each defrauded Madoff investor will substantially increase. (more…)

Federal securities regulators have charged Cohmad Securities Corp. and three of its officials with helping admitted swindler Bernard Madoff raise money from investors that was used to fuel his $65 billion Ponzi scheme. In a separate case, the Securities and Exchange Commission (SEC) also charged California-based investment adviser Stanley Chais - who ran three feeder funds that funneled money to Madoff - with securities fraud.

Madoff pleaded guilty to 11 criminal charges last March, including securities fraud, wire fraud, mail fraud, money laundering and making a false filing with the U.S. Securities and Exchange Commission. At the time of his plea, Madoff publicly admitted he had run a Ponzi scheme. (more…)

Investigators working on the massive Bernard Madoff Ponzi scam are hoping for more time to determine the full amount of claims and the number of defrauded investors.

Reuters explained that investigators noted that the request for additional time should, in no way, delay Madoff’s sentencing, which is scheduled for June 29, citing U.S. prosecutors and court papers. “The requested order would permit the June 29 sentencing to proceed as scheduled, while allowing the effort to identify victims and losses to proceed apace,” the court document said, reported Reuters. (more…)

Court appointed liquidators in the United Kingdom have sued Bernard Madoff’s brother Peter, for recovery of a vintage Aston Martin, reports the Wall Street Journal. The car was purchased with monies derived from Madoff’s U.K. business, London-based Madoff Securities International Limited (MSIL).

According to lawsuit documents, the British arm of Madoff’s business wired £135,000—$201,353—to Aston Martin in 2008 for the purchase of a car for Peter Madoff and his wife, said the Journal. The complaint states the transfers were “not legitimately reimbursed,” said the South Florida Business Journals (BizJournals). The lawsuit was filed in the U.S. Bankruptcy Court in West Palm Beach, Florida, noted the Journal, which pointed out that Peter—who was a director, manager, and shareholder of the British operation—lives in Florida. The lawsuit, in addition to seeking recovery of the Aston Martin, is also looking to recover other losses, which include punitive damages, said BizJournals.

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Officials just announced that over $161 million has been approved for compensation payouts to 347 defrauded Bernard Madoff investors. The money is slated to pay advances of up to $500,000 per investor, considered a very small percentage of claims that total $1.02 billion, reported Newsday. The nonprofit Securities Investor Protection Corporation (SIPC) is handling payment distribution.

Astoundingly, the amount to be paid, thus far, in the Madoff scam is four times what was paid out in what is considered the next largest collapse of a securities company, noted Newsday, citing the Sunpoint Securities Inc. case that originated in 1999 in Texas. Total payouts in that debacle, including administrative expenses, totaled $34.7 million. (more…)

In a suit just filed in Manhattan federal court by Criterium Capital Funds BV, BBF Trust, and three other investors, Kingate Management Ltd. and its directors were sued for $3.5 billion, reports Bloomberg.com. The suit involves two funds invested in Bernard L. Madoff Investment Securities LLC. According to the plaintiffs, said Bloomberg.com, Kingate “made negligent misrepresentations … and breached its duty.”

Before his arrest late last year, disgraced financier Bernard Madoff told his investors that his fund held more than $64 billion, but in reality, he only had a fraction of that amount. As we reported previously, Madoff never made a single trade on behalf of his investors. Madoff pleaded guilty to 11 criminal charges last March, including securities fraud, wire fraud, mail fraud, money laundering, and making a false filing with the U.S. Securities and Exchange Commission (SEC). At the time of his plea, Madoff publicly admitted he had run a Ponzi scheme. Madoff is being detained at the Manhattan Correctional Center in New York City, where he is awaiting sentencing scheduled for later this month. He faces as much as 150 years in prison. (more…)

Bankruptcy cases involving Bernard Madoff will be consolidated in an attempt to save money and increase the chances that stolen assets will be recovered, Bloomberg.com is reporting. The decision means that one trustee will oversee Madoff’s personal bankruptcy, as well as another bankruptcy proceeding involving the admitted swindler’s business brought by the Securities Investor Protection Corp. (SIPC).

Madoff pleaded guilty to 11 criminal charges last March, including securities fraud, wire fraud, mail fraud, money laundering and making a false filing with the U.S. Securities and Exchange Commission. At the time of his plea, Madoff publicly admitted he had run a Ponzi scheme. Madoff is being detained at the Manhattan Correctional Center in New York City, where he is awaiting sentencing scheduled for later this month. He faces as much as 150 years in prison. (more…)

Wells Fargo and Bank of America have reached separate agreements to settle securities fraud charges with various state and federal regulators. According to a Wall Street Journal report, the Wells Fargo settlement involves its Boston-based mutual fund Evergreen Investment Management Co, while the Bank of America settlement resolves charges regarding the sale of auction rate securities.

According to the Journal, Wells Fargo has agreed to pay $40 million in an agreement with the Securities and Exchange Commission (SEC) and the Massachusetts Securities Division to settle charges that Evergreen misled investors about the value of some securities it sold and making selective disclosures to investors. As part of the settlement agreement, Evergreen did not admit to any wrongdoing. At the time the allegations covered by the settlement occurred, Evergreen was a unit of Wachovia Group, which was acquired by Wells Fargo last year.
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