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New York Times Blogs – Sure, it’s tough being a journalist these days. But if you think the news business is in trouble, try being a journalist turned financier. Some of the reporters who have left their ink-stained professions for the high-paying world of finance haven’t had it easy either.
The latest is Rob Speyer, scion of the Tishman Speyer real-estate empire. As the WSJ reported on Wednesday, a former reporter at The New York Observer and New York Daily News, Speyer is being groomed to take over the New York real estate firm, which recently defaulted on debt tied to a big portfolio of office buildings it bought in Washington, D.C. The firm also is under stress from its top-of-the-market purchase of Archstone Smith, a high-end-apartment landlord, and the Manhattan apartment complexes of Peter Cooper Village and Stuyvesant Town. Speyer tells the WSJ that despite some problems, Tishman Speyer has a “good track record” and $2 billion in liquidity.
New York (Hedgeco.Net) – Bernard Madoff was finally promoted from house arrest to maximum security prison, after pleading guilty to the largest Ponzi scheme in history. Madoff, who swindled an estimated $65 billion out of the most elite investors, could face up to 150 years of prison.
“I operated a Ponzi scheme through the investment advisory side of my business,” Madoff admitted to U.S. Judge Denny Chin at the hearing, referring to Bernard L. Madoff Investment Securities LLC. He did contend that his U.K.-based affiliate, Madoff Securities International along with the units run by his two sons were all legitimate entities.
“I am actually grateful for this opportunity to publicly speak about my crimes, for which I am so deeply sorry and ashamed,” Madoff confessed in the Manhattan courtroom. “I knew what I was doing was wrong, indeed criminal.”
Madoff spent years building up a stellar reputation with the rich and famous, many of whom invested their life savings with him. Madoff told the judge he started feeling pressure in the early 90’s to deliver the consistent returns that his investors expected. This jump started the staple Ponzi scheme action of using new capital coming in to pay returns to existing investors.
Instead of investing in securities like he promised his clients, Madoff instead deposited their cash into an account at Chase Manhattan Bank, where he would withdraw funds as needed for investor redemptions.
“I believed it would end shortly, and I would be able to extricate myself,” he said of the scheme. “As the years went by, I realized that my arrest and this day would inevitably come.”
Madoff’s sons have not been charged with any wrongdoing, nor have any employees at his New York City headquarters although investigations are still in the works. Attorneys for Madoff’s wife, Ruth, state that she was the sole owner of their Manhattan apartment, along with $17 million in cash and $45 million in bonds.
Madoff’s attorney, Ira Sorkin said he would appeal the jailing before his sentencing hearing on June 16.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Bloomberg - A hedge fund manager who used the same defense lawyer as Bernard Madoff received a sentence that was a third of the maximum possible after he was convicted of defrauding investors out of $10 million.
Vincent Montagna remains free on bail more than two years after pleading guilty. He was sentenced to 40 months in prison instead of a possible 9-year term. His lawyer, Ira Sorkin, also represents Madoff, the New York investment adviser U.S. prosecutors accused of running a $50 billion Ponzi scheme.
Though Montagna and Madoff aren’t known to be connected beyond their choice of attorney, the case may provide a window on Madoff’s prospects in avoiding or reducing the maximum 20 years in prison he faces if convicted. Madoff, 70, is free on bail, though restricted to his Manhattan apartment.
New York (HedgeCo.Net) – Bernard Madoff will continue his house arrest at his swanky Manhattan apartment, after a judge refused to send him to prison on Monday.
Madoff’s lawyers have pointed out that he has cooperated fully with officials and investigators since allegedly confessing his $50 billion Ponzi-scheme to his sons last month.
“Aside from the bare assertion that there remains some risk of flight, the government has failed to articulate any flaw in the current conditions of release,” said Judge Ronald Ellis of U.S. District Court in Manhattan, speaking of the government’s original push to incarcerate Madoff.
Prosecutors have tried to convince the court that Madoff is a flight risk after forging alliances with individuals all across the globe. They also said he violated a court order that froze his assets after he dispersed more than $1 million worth of valuables via mail to friends and family.
Right now, Madoff is under 24 hour surveillance at his Manhattan home. His incoming and outgoing mail is also under investigation and he must provide a list to the U.S. government that outlines his portable valuables.
If convicted, Madoff faces up to 20 years in prison in what has proved to be the largest Wall Street scam in history. Dozens of wealthy individuals, banks, hedge funds and financial institutions have lost billions in investments tied to Madoff.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
