CNN is now reporting that Picard intends on suing four more of Bernard’s family members for about $200 million this week, citing a CBS “60 Minutes” broadcast report. Picard will be suing both of Madoff’s sons, Mark and Andrew; Bernard’s brother, Peter; and Bernard’s niece, Shana for a combined total of $198 million, said CNN.

This lawsuit is in addition to another Picard filed for $44.8 million against Ruth, Bernard’s wife, this July, said CNN. The amount correlates to the monies Ruth transferred from Bernard’s investment firm over six years, CNN added. Picard was appointed by the U.S. Bankruptcy Court in New York and appeared on “60 minutes” with his attorney, David Sheehan. Picard said he believes the $198 million is what the four Madoff relatives took out of Bernard L. Madoff Investment Securities.

Madoff, 71, was sentenced to 150 years in prison for running a massive Ponzi scheme that is estimated to be the largest in history and which has allegedly cost investors as much as $65 billion. Bernard L. Madoff Investment Securities is the investment firm that served as a ”front” for the scam, noted CNN.

The disgraced financier apologized at his sentencing in June for lying to thousands of investors and deceiving his wife, brother, and sons, said Bloomberg.com previously. Peter was the firm’s former chief compliance office and both sons managed the trading division of Madoff’s now-defunct investment firm.

Daily Finance previously explained that it has been difficult to determine exactly what the family knew of Madoff’s deceit and activities noting that some have pointed out that while it would seem impossible that the brother and sons could be unaware of what was happening, there are those who believe Bernard found his sons to be incapable of handling his business affairs and, thus, kept them ignorant. Regardless, said Daily Finance, the sons received many benefits as a result of Bernard’s schemes.

Picard continues to work to determine how much Madoff stole because, although he claimed to have $65 billion, the figure was based on bogus investment statements, said CNN. The U.S. Attorney's office in New York said the losses suffered by Madoff’s 2,336 victims exceeded $13 billion, as of last week, said CNN.

Earlier this year, the Washington Post said the Security and Exchange Commission’s (SEC) internal investigation was focusing, in part, on the relationship between Madoff’s niece, Shana Madoff, and her husband, Eric Swanson.  Shana served as Bernard’s compliance officer, and Swanson, a former SEC official, was involved in the 2004 SEC examination of Madoff’s business before their marriage, the Post said.  Swanson also conducted an internal review of the 1999 examination. Although the SEC maintained that Swanson played no role in any Madoff examinations after his personal relationship with Shana began in 2006, according to the Post, Madoff reportedly bragged of their marriage at a conference last year, when he spoke of having “close” ties with regulators.

Madoff is now spending 150 years in prison for orchestrating a Ponzi scam that is estimated to have cost duped investors an incomprehensible $65 billion. And, recently, the SEC has come under fire for apparently missing warnings that something was terribly amiss with Madoff’s investment advisory business.

Former SEC chairman Christopher Cox called for an investigation of the agency this December, following Madoff’s now famous arrest. The recently released report discusses, in part, the agency’s failure to notice or prevent Madoff’s Ponzi scheme. Cox, asked, for example, why the agency believed allegations made through the years about Madoff to be “not credible,” reported FOX Business.

As part of the investigation, SEC Inspector General H. David Kotz, looked at how the SEC handled its dealings with Madoff, said FOX Business previously. According to a prior Bloomberg.com piece, the investigation looked at how the agency failed to detect the historic fraud since 1992 and faults the SEC for not fully going after tips, having inexperienced staff handle reviews, not looking into unbelievable and sustained profits, not pushing when Madoff was clearly caught in lies, and not pursuing trading records that would have pointed them to the scam. It seems the SEC cut an examination short, shifting gears to work on another issue; did not release many hundreds of exhibits that are noted in the report, one of which was Madoff testimony from this June; and released the report after business hours ended prior to the recent extended Labor Day weekend.

Now, the Business Insider is reporting that the Financial Industry Regulatory Authority (FINRA), said to have close ties to Madoff, might not release the report to the public. It is expected that a decision will be made this week, said Bloomberg.com, which noted that the 21-member board handled the review following Madoff’s confession. One anonymous source, said Bloomberg.com, argued that according to the committee’s chairman, the document is expected to be released.

Recently, in what some were calling a strange twist of fate, an SEC enforcement official, whose relatives entrusted millions to the scheme, received a tip in 2005 about the Madoff scam, which was received anonymously by the Office of Internet Enforcement via email, and was one of no less than six “substantive complaints” that went uninvestigated over 16 years, according to Kotz, said Bloomberg. Kotz’s statement was released in advance of his testimony before the Senate, reported Bloomberg.com.

The investments, which were made by two of the SEC official’s family, were indicated as a footnote in the report—numbered at some 457 pages—and did not disclose the official or the losses, added Bloomberg.com. Katz said that the official involved was not part of the investigation into Madoff’s activities.

The tip said, quoted Bloomberg.com, “I know that Madoff (sic) company is very secretive about their operations and they refuse to disclose anything. If my suspicions are true, then they are running a highly sophisticated scheme on a massive scale. And they have been doing it for a long time…. After a short period of time, I decided to withdraw all my money (over $5 million).”

Picard was hired by the Securities Investor Protection Corporation (SIPC) to recover some of the $65 billion Madoff’s investors lost to his scam. So far, Picard has been able to collect $1.22 billion as a result of his efforts.

Madoff pleaded guilty to 11 fraud counts on March 12. The former chairman of the NASDAQ stock exchange ran an investment advisory business for decades that was, in reality, a Ponzi scheme. Last November, Madoff told his investors his fund held over $64 billion, but in reality, it only held a mere fraction of that amount. Because Madoff’s Ponzi scheme went on for decades, it is suspected that he was far from the only person in his circle who knew of the swindle. It’s known that several people close to Madoff—including key employees, as well as his wife, sons, and brother—were among those close to him caught up in the probe.

According to an earlier Bloomberg.com report, 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 is also seeking about $735 million from Madoff customers outside of court. Sadly, in spite of these efforts, most experts expect that Madoff’s former investors will only recover pennies on the dollar.

ABC News reported that, as of this week, letters were issued to commit over $116 million to satisfy claims from the some 237 Madoff victims expected to receive up to $500,000 from the SIPC.  This is part of the hardship program Picard initiated to reclaim Madoff’s assets on behalf of the disgraced financier’s victims. The program will enable individual victims experiencing significant financial hardship to file a special claim by July 2 that seeks “an accelerated federal insurance payment,” Picard announced, said USA Today previously, with each applicant eligible to qualify for up to $500,000.

Picard said his office has received close to 9,000 claims from swindled investors and called Madoff’s scam the “most complicated and far reaching financial fraud in U.S. history,” quoted ABC News.

Most recently, Picard reached a deal with Spain’s largest bank regarding investments two of its hedge funds made with the admitted Ponzi schemer. According to Bloomberg.com, Banco Santander will pay $235 million to Picard to avoid a lawsuit. Santander’s Optimal Investment Services unit operated the two hedge funds, Bloomberg.com said. Santander said its agreement with Picard did not imply any wrongdoing on its part.

As we reported previously, losses for Banco Santander’s clients were among the highest of any bank linked to Madoff’s investment advisory business. As a result of its Madoff’s investments, the bank’s clients lost more than $3.1 billion. Yet, just weeks before Madoff’s Ponzi scheme collapsed, managers at Banco Santander’s Optimal hedge fund investment arm were praising Madoff’s supposedly “impeccable” market timing. The massive losses prompted some Santander clients to file a class action lawsuit against the bank in Miami, charging it did not perform enough due diligence regarding its Madoff investments.

KV said it is likely these moves will have a significant and an adverse effect on its financial profile, which might place it an out-of-compliance status with a number of aspects of its credit agreements, said the St. Louis Journal.  The moves will also “wipe out” most of KV’s market value, Reuters said.  KV’s line of credit totaled around $30 million at year-end, 2008, said the St. Louis Business Journal.

KV is in discussions with the U.S. Food and Drug Administration (FDA)—which has been inspecting the drug maker’s operations and inventories since December 2008—to determine the impact of the recall, said the St. Louis Business Journal.  KV is also working with Lachman Consultant Services, Inc., an outside consultant, to and review KV’s manufacturing and packaging processes, reported the St. Louis Business Journal.

Reuters said KV has faced a number of production issues that resulted in oversized tablets, is in the midst of a number of class-action lawsuits that allege KV officers falsified information and exaggerated stock prices, and is also in the midst of an informal enquiry by the U.S. Securities and Exchange Commission (SEC).  According to a regulatory filing yesterday, KV fired its senior vice president and general counsel, Gregory Bentley, said Reuters; its board of directors also fired KV chief executive, Marc Hermelin, in early December for cause and amid a probe alleging mismanagement, said the St. Louis Business Journal, which said David Van Vliet has been named interim chief executive.

In December, KV, suspended shipments of all its tablet medications and recalled one lot of Hydromorphone HCl 2 mg tablets because the painkiller’s tablets were oversized, said the St. Louis Business Journal.  The medication is a narcotic painkiller used in the treatment of moderate to severe pain.  An overdose, which could occur when too much medication is received from an oversized tablet, could result in respiratory problems, coma, bradycardia, hypotension, apnea, circulatory collapse, cardiac arrest, and even death, to name some.

In response to the mounting problems, KV has convened a committee—which has retained its own legal council—to handle the shareholder lawsuits, which allege federal securities law violations; the SEC enquiry; and requests from both the Office of the U.S. Attorney for the Eastern District of Missouri and FDA representatives working with that office, said the St. Louis Business Journal.

Meanwhile, KV’s emerging drug, Gestiva, a medication prescribed to prevent preterm birth in women with a history of such deliveries, will not receive FDA approval until certain criteria are met, said Reuters.  The drug was expected to receive approval by late last year; KV had made plans to purchase U.S. and international rights to the drug from Hologic, Inc. for $82 million in cash upon FDA approval, said Reuters, which noted that KV’s stock has been plummeting to historic lows since yesterday.

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