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.

The lawsuit, explained BizJournals, was filed for bankruptcy recognition and includes a lawsuit to recover the 1964 Aston Martin DB2/4 and also stated that Peter Madoff used accounts with MSIL to buy the high-end luxury car. BizJournals added that the car is kept at Peter Madoff’s home, which is located at 200 Algoma Road, in Palm Beach, Florida.

The British petition is a Chapter 15 filing and, in effect, seeks recognition of bankruptcies in foreign jurisdictions, explained BizJournals. The complaint also states that MSIL traded for the personal accounts of Bernard Madoff and members of his immediate family; Madoff used MSIL’s assets and bank accounts to buy items such as luxury yachts and automobiles, and furnishings for himself and Madoff family members, to name just a few, said BizJournals.

On March 12, Madoff pleaded guilty to 11 fraud counts in what is believed to be the largest Ponzi scheme in history. Last November, Madoff told his investors that his fund held more than $65 billion, but in reality, he only had a fraction of that amount. Since his guilty plea, Madoff has been held at the Manhattan Correctional Center and faces a June sentencing and up to 150 years in prison.

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Meanwhile, On Monday, a filing was made in New York for a personal involuntary bankruptcy for Bernard Madoff in an attempt to recover personal assets of Madoff and his relatives, said BizJournals. According to The Wall Street Journal, the filing says investors’ claims are based on breach of contract, conversion, and fraud. The filing also states that because of Madoff’s guilty plea in his criminal case, the claims are not disputed. The investors claim Madoff owes them a total of $64 million, which is based on the balances contained in the last statements they received from Bernard L. Madoff Investment Securities LLC, the Journal said. If the claim is granted, Madoff’s assets will be subject to liquidation under Chapter 7 bankruptcy.

Earlier this month, the investors petitioned a federal judge to rescind an order that prevented a forced bankruptcy. Federal prosecutors and the Securities and Exchange Commission (SEC) indicated they intend to seek forfeiture and disgorgement of Madoff’s assets in both the criminal and civil cases. But, according to the attorney representing the investors behind the bankruptcy petition, it is unclear if they intend to distribute any such funds to Madoff’s customers and what rules would govern any such distribution.

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.

The 347 Madoff claims receiving advances represents a very small portion of the almost 9,000 claims filed to date, said Newsday, noting that SIPC is only covering a “fraction” of the losses. “This case is on a different order of magnitude, in terms of SIPC, than anything we have covered,” said agency president Stephen Harbeck, quoted Newsday. Investigators and officials differ on how the case will progress, with some believing that payout amounts will greatly increase while others state losses will end up being half of the $65 billion reportedly lost in the historic Ponzi scam, said Newsday.

Before his arrest late last year, the disgraced financier 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.

The trustee appointed to liquidate Madoff Securities, Irving Picard, was appointed by SIPC and charged with locating and liquidating assets from Madoff’s investment business in an attempt to recover some funds for his defrauded investors. In recent months, Picard has filed several claw back lawsuits seeking a total of $10.1 billion in profits withdrawn by Madoff investors that he claims should have known of the fraud. Picard also is seeking about $735 million from Madoff customers outside of court.

Most recently, we wrote that bankruptcy cases involving Madoff will be consolidated in an attempt to save money and increase the chances that stolen assets will be recovered, citing an earlier Bloomberg.com report. This means one trustee will oversee Madoff’s personal bankruptcy, as well as another bankruptcy proceeding involving the admitted swindler’s business brought by the SIPC. In agreeing to consolidate the Madoff cases, a common trustee is believed to “maximize” the odds of asset recovery and avoid duplication of efforts, Bloomberg.com said. The judge involved also said that Madoff’s creditors would benefit from the consolidation “because SPIC is underwriting the costs of the recovery.” Picard backed the consolidation, the Associated Press said.

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.

Regarding the recent lawsuit, “Defendants in fact did not properly vet or monitor Madoff and, instead, falsely reported steadily increasing account values to plaintiffs while paying themselves hundreds of millions of dollars in fees,” the investors said in their complaint, quoted Bloomberg.com. The lawsuit comes on the heels of others that have been filed against Madoff feeder funds, such as the Fairfield Greenwich Group and Gabriel Capital LP, said Bloomberg.com, adding that the plaintiffs are now looking to combine into class-action status to include investors in the Kingate funds.

Earlier this year, the trustee appointed to liquidate Madoff Securities sued Kingate in Manhattan’s U.S. Bankruptcy Court seeking the return of $255 million that had been transferred to the firm’s funds just prior to the collapse of Madoff’s Ponzi scheme. Following Madoff’s arrest, the Securities Investor Protection Corporation (SIPC) appointed Irving Picard as trustee, and charged him with locating and liquidating assets from Madoff’s investment business in an attempt to recover some funds for his defrauded investors.

In recent months, Picard has filed several claw back lawsuits seeking a total of $10.1 billion in profits withdrawn by Madoff investors that he claims should have known of the fraud. Picard also is seeking about $735 million from Madoff customers outside of court. So far, Picard has received roughly 9,000 claims from cheated Madoff investors.

Most recently, we wrote that bankruptcy cases involving Madoff will be consolidated in an attempt to save money and increase the chances that stolen assets will be recovered, citing an earlier Bloomberg.com report. This means one trustee will oversee Madoff’s personal bankruptcy, as well as another bankruptcy proceeding involving the admitted swindler’s business brought by the SIPC. In agreeing to consolidate the Madoff cases, Judge Burton Lifland of U.S. Bankruptcy Court in Manhattan said a common trustee would “maximize” the odds of asset recovery and avoid duplication of efforts, Bloomberg.com said. The judge also said that Madoff’s creditors would benefit from the consolidation “because SPIC is underwriting the costs of the recovery.” Picard backed the consolidation, the Associated Press said.

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.

Before his arrest late last year, 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.

In agreeing to consolidate the Madoff cases, Judge Burton Lifland of U.S. Bankruptcy Court in Manhattan said a common trustee would “maximize” the odds of asset recovery and avoid duplication of efforts, Bloomberg.com said. The judge also said that Madoff’s creditors would benefit from the consolidation “because SPIC is underwriting the costs of the recovery.”

Following Madoff’s arrest, the SIPC appointed Irving Picard as trustee, and charged him with locating and liquidating assets from Madoff’s investment business in an attempt to recover some funds for his defrauded investors. In recent months, Picard has filed several claw back lawsuits seeking total of $10.1 billion in profits withdrawn by Madoff investors that he claims should have known of the fraud. Picard also is seeking about $735 million from Madoff customers outside of court.

Picard had backed the consolidation, the Associated Press said. At yesterday’s hearing, the trustee’s attorney said that Madoff’s personal holdings and those of his firm, Bernard L. Madoff Investment Securities, were “hopelessly intertwined.”

According to Bloomberg.com, Picard said he expected the total amount of assets recovered for Madoff’s victims could increase by $235 million to $1.2 billion by next week. In addition to monies recovered through Picard’s liquidation efforts, some Madoff investors could be eligible for up to $500,000 in reimbursement from the SIPC.

So far, Picard has received roughly 9,000 claims from cheated Madoff investors.

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.

The SEC alleged that Evergreen inflated the value of mortgage-related securities in its Evergreen Ultra Short Opportunities Fund by as much as 17% between February 2007 and June 2008, when it closed and liquidated the fund, the Journal said. The SEC charged that Evergreen began repricing the securities after its valuation committee learned on June 10, 2008 that the portfolio managers had known since March about problems with a certain mortgage-backed security but had failed to disclose it to the committee.

When Evergreen began to reprice the overstated holdings in the fund, regulators allege it only let certain customers know. These customers – many were also customers of Evergreen affiliate Wachovia Securities LLC – were also told more adjustments were coming. As a result, the regulators charge, those customers given preferential treatment were able to cash out and lessen their losses. By law, mutual funds must treat all investors equally, the Journal said.

Bank of America has reached an agreement with the California Department of Corporations to “facilitate” the return of more than $3 billion to clients in that state who purchased auction rate securities, the Journal said. The state will also receive $9.7 billion in penalties from Bank of America as part of a multi-state probe of the auction rate securities market.

As we’ve reported previously, auction rate securities are financial instruments on which the interest rates are reset periodically based on bids submitted through securities firms. Generally, rates are reset every seven, 14, 28 or 35 days. Because they could be sold during weekly or monthly auctions, banks and brokerages often touted auction rate securities as short-term investments or cash equivalents. Unfortunately, because of the credit crises, the market for auction rate securities crashed in 2008. Thousands of investors were bewildered to find out that the investments they were sold as cash equivalents were actually illiquid.

According to a report on CNN.com, California regulators noted that Bank of American made repurchase offers to all individual, small-business and charitable institutional investors from California. The company has also promised its “best efforts” to work with auction rate securities issuers, state and federal regulators and other parties to attempt to provide liquidity for institutional investors by the end of the year.

According to CNN.com, Bank of America has not admitted nor denied any of the charges detailed by the settlement order.