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Thereesa “Cookiez” Collins
5 years ago
The Information Would Be Filed Today. Bernard Madoff will comply with a court order to furnish the Securities and Exchange Commission (SEC) with a list of his assets. According to Reuters, the accused Ponzi schemer’s lawyer said the information would be filed today, in time for a Wednesday deadline. The 70-year-old Madoff was arrested on […]
The Information Would Be Filed Today. Bernard Madoff will comply with a court order to furnish the Securities and Exchange Commission (SEC) with a list of his assets. According to Reuters, the accused Ponzi schemer’s lawyer said the information would be filed today, in time for a Wednesday deadline.
The 70-year-old Madoff was arrested on one count of securities fraud on December 11. Madoff – once a chairman of the Nasdaq stock exchange – is the founder and primary owner of Bernard L. Madoff Investment Securities LLC. The firm is primarily known for its business in market-making, or serving as the middleman between buyers and sellers of shares. However, Madoff also oversaw an investment-advisory business that managed money for high-net-worth individuals, hedge funds and other institutions.
According to the FBI complaint against Madoff, that business was largely a Ponzi scheme. The FBI said Madoff “deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars.” Madoff reportedly told employees that his fraud could cost investors as much as $50 billion.
A December 18 court order required Madoff to provide the SEC with a listing of his assets. According to Reuters, the information will become part of an investigation into how Bernard L. Madoff Investment Securities LLC was run and how some of his investors’ losses might be recovered.
Meanwhile, the Reuters article provided more details on a Congressional hearing on the Madoff scandal that is slated for January 5. As we reported earlier this week, House Financial Services Committee member Paul Kanjorski (D-PA) said in an email statement the hearing will “help us to discern whether or not the Securities and Exchange Commission had the resources needed to get the job done, how such a sizable scheme could have evaded detection for so long, and what new safeguards we need to put in place to protect investors.”
According to Reuters, SEC Inspector General David Kotz, who is probing the agency’s oversight failures in the Madoff case, will be called to testify at the hearing. Harry Markopolos, the former chief investment officer at Rampart Investment Management who said he repeatedly tried to get the SEC to investigate Madoff, will also appear, Reuters said.
The SEC has faced a great deal of criticism over the Madoff scandal. According to The Washington Post, the SEC conducted routine examinations of the company in 1999, 2004, and 2005, as well as an investigation that ended in 2007. Only the 2005 examination found “minor problems”.
At least one investor has already brought a claim against the SEC for its role in the Madoff scandal. According to a report that appeared in Newsday last month, Phyllis Molchatsky, 61, of upstate New York, has filed an administrative claim against the SEC, accusing the regulator of “negligent conduct.” Molchatsky is seeking $1.7 million in damages from the SEC for allowing Madoff’s alleged Ponzi scheme to continue unchecked for at least a decade. If the SEC doesn’t respond to Molchatsky’s claim in six months, she can pursue her allegations against the agency in a federal court, Newsday said.
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