Reuters – Maxam, an investment adviser based in Darien, Connecticut, relied on the auditors for their expertise in examining Madoff’s firm, according to the lawsuit filed in Connecticut Superior Court in Fairfield County.

The lawsuit, though, said the auditors issued "unqualified" opinions for 2006 and 2007 audits that stated Maxam’s financial statements presented its true financial position.

Maxam was one of many funds that invested with Madoff, who in December was arrested for allegedly running a $50 billion (35.2 billion pounds) Ponzi scheme. Maxam contends the auditors were negligent when performing Maxam’s 2006 and 2007 audits.

Read Complete Article

Tags: audits, connecticut superior court, darien connecticut, fairfield county, financial position, financial-statements, investment-adviser, maxam, reuters

Forbes – A federal judge in Florida ruled Wednesday that the head of two hedge funds deceived investors about the funds’ holdings. Elsewhere, federal regulators accused a California investment adviser of making tainted recommendations to clients.

In the Florida case, U.S. District Judge Kenneth Marra ruled that Michael Lauer, the head of Connecticut-based hedge funds Lancer Management Group and Lancer Management Group II, engaged in a fraud that cost investors about $500 million, according to the Securities and Exchange Commission.

Marra granted the SEC’s request for summary judgment against Lauer, finding that he overstated the hedge funds’ values from 1999 to 2002, manipulated the prices of seven securities that were an important part of the portfolios, and deceived investors about the funds’ holdings by providing them with fake financial statements.

Read Complete Article

Tags: 6-million, audits, contention, dealer-operations, federal-reserve, investor-protections, invoices, liquidators, medallion, misrepresentation, new-marketplace, news-press, palm-beach, r-alexander

MSN UK News- The Hong Kong media says a 63-year-old U.S. citizen has received a longer jail term for masterminding a HK$363 million, or US$46.49 million or euro30 million, hedge fund fraud.

The South China Morning Post reported Wednesday that a court added 26 months to Charles Schmitt’s sentence. It says Schmitt was sentenced in 2006 to 4 1/2 years in prison after he pleaded guilty to 19 charges for forging financial statements.

A three-judge panel at the Court of Appeal is quoted as saying that the original sentence was "manifestly inadequate."

Read Complete Article

Tags: 6-million, armed-and-dangerous, audits, exchange-value