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New York (HedgeCo.Net) – Peter Madoff, brother of convicted Ponzi schemer Bernard Madoff, had his assets temporarily frozen by a New York State Judge yesterday. The Chief Compliance Officer of Bernard L. Madoff Investment Securities LLC was sued by an investor who lost almost half a million dollars in the master fraud committed by his brother.
The plaintiff, Andrew Samuels, entrusted Peter Madoff with an inheritance of $470,000 in which Peter, who was the sole trustee from 2003 to 2008, took and invested with his brother. When the scam collapsed and Samuels realized all of his money was gone, he contested that Peter breached his fiduciary duty.
New York State Supreme Court Justice Stephen A. Bucaria froze the assets until the next hearing on April 3rd.
Despite the massive $50 billion fraud that Bernard Madoff masterminded for decades, no other employees of the firm or subsidiaries have been charged with any wrongdoing.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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West Palm Beach (HedgeCo.net) – In an effort to makes major changes to the EU financial regulation services, the European Commission (EC) has launched ‘Driving European Recovery’, a consultation on major structural changes to European financial services and markets regulation.
The EC are looking for investors such as hedge funds and other interested parties to interview and submit comments before April 10th, when the EC intends to publish its proposals on the future of the EU supervisory architecture.
The Commission endorses the key principles set out in the recent de Larosière report and calls for a supervisory system combining stronger oversight at EU level with maintaining a key role for national supervisors.
The Commission will propose an ambitious new reform programme, designed to deliver “responsible and reliable financial markets for the future”.
The reform program will present a supervisory framework that detects potential risks early, deals with them effectively before they have an impact, and meets the challenge of complex international financial markets.
The Commission will present a European financial supervision package before the end of May 2009, according to a statement, fill gaps where European or national regulation is insufficient or incomplete, based on a ‘safety first’ approach and improve risk management in financial firms and align pay incentives with sustainable performance.
Among other proposals to be revealed in May, the EC will, "Ensure more effective sanctions against market wrongdoing."
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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
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
Globe and Mail – A long-running legal dispute between Fairfax Financial Holdings Ltd. and a group of hedge funds has produced a sideshow involving the chief executive officer of one of Canada’s biggest mutual fund companies.
Fairfax, a Toronto-based insurance conglomerate, wants Bill Holland, the chief of CI Financial Corp., to testify in connection with its bitter lawsuit, which alleges hedge funds conspired to drive down its stock price.
Neither CI nor Mr. Holland is named in that lawsuit, and no wrongdoing is suggested. And while CI says it will co-operate, Mr. Holland yesterday called the situation absurd.
