"Many People on Wall Street Knew" Bernie Was a Crook, Madoff Author Says

"Many People on Wall Street Knew" Bernie Was a Crook, Madoff Author Says

Madoff ruined lives, victims say. Madoff ordered to forfeit over $170 billion

Madoff ordered to forfeit over $170 billion
NY prosecutors: Judge orders disgraced financier Bernard Madoff to forfeit over $170 billion

NEW YORK (AP) -- Disgraced financier Bernard Madoff must forfeit $170 billion, a federal judge ordered Friday.

U.S. District Judge Denny Chin entered a preliminary order of forfeiture, and Acting U.S. Attorney Lev Dassin released a copy of the order Friday night. Madoff was ordered to give up his interests in all property, including real estate, investments, cars and boats.

According to earlier court documents, prosecutors reserved the right to pursue more than $170 billion in criminal forfeiture. That represents the total amount of money that could be connected to the fraud, not the amount stolen or lost.

The government also settled claims against Madoff's wife, according to Friday's order. Under the arrangement, the government obtained Ruth Madoff's interest in all property, including more than $80 million of property to which she had claimed was hers, prosecutors said.

The order makes it clear, though, that nothing precludes other departments or entities from seeking to recover additional funds.

A call to Madoff's lawyer, Ira Sorkin, after hours Friday was not immediately returned.

In his own court filing in March, Sorkin said the government's forfeiture demand of $177 billion was "grossly overstated -- and misleading -- even for a case of this magnitude."
The agreements strip the Madoffs of all their interest in properties belonging to them, including homes in Manhattan, Montauk, and Palm Beach, Fla., worth a total of nearly $22 million. The Madoff's must also forfeit all insured or salable personal property contained in the homes.

Other seized assets include accounts at Cohmad Securities Corp., valued at almost $50 million, and at Wachovia Bank, valued at just over $13 million, and tens of millions of dollars in loans extended by Madoff to family, employees and friends.
The judge's order also authorized the U.S. Marshals Service to sell the Manhattan co-op, properties in Montauk and Palm Beach and certain cars and boats.

Madoff, 71, is due to be sentenced Monday after pleading guilty in March to charges that his exclusive investment advisory business was actually a massive Ponzi scheme.
Federal prosecutors want Madoff to be sentenced to 150 years in prison for orchestrating perhaps the largest financial swindle in history.

Madoff's lawyer has said his client should serve only 12 years.
"The sheer scale of the fraud calls for severe punishment," the prosecutors wrote in response to a defense motion seeking lighter punishment.
Federal sentencing guidelines allow for the 150-year term, prosecutors said. Any lesser sentence, they added, should still be long enough to send a forceful message and "assure that Madoff will remain in prison for life."
The government's papers quoted from letters to U.S. District Judge Denny Chin written by victims of the scheme who are suffering severe hardships.

Madoff "ruined lives," one letter said. "He deserves no mercy."

At the time of Madoff's arrest, fictitious account statements showed thousands of clients had $65 billion. But investigators say he never traded securities, and instead used money from new investors to pay returns to existing clients.
Prosecutors said Friday that the total losses, which span decades, haven't been calculated. But 1,341 accounts opened since December 1995 alone suffered loses of $13.2 billion, they said.
Sorkin argued in court papers last week for a 12-year term. He said his client deserved credit for his voluntary surrender, full acceptance of responsibility and meaningful cooperation efforts.
"We seek neither mercy nor sympathy," Sorkin wrote. But he urged the judge to "set aside the emotion and hysteria attendant to this case" as he determines the sentence.

Madoff results were impossible to replicate

Madoff results were impossible to replicate

Michael Markov, chief executive of Markov Processes International, said his company analyzed one of Fairfield Greenwich's funds that invested with Madoff in 2006 and concluded the returns were most likely not real. Such returns would have required perfect foresight and more option contracts than existed in the market, he said.
"It was impossible to replicate," Markov said.
Click on the link to visit the Markov Processes International website

(Since 1992, Markov Processes International has been a preeminent provider of customized solutions to the financial services industry. By harnessing our great expertise in advanced mathematics, financial analysis and software development, we have developed software applications and consulting services that reflect the creative spirit and advanced thinking that define our organization. It is the unique appreciation and understanding of our clients' needs, however, that is most responsible for the flexible and efficient nature our products. We strive to continually provide the most advanced solutions to our clients, regardless of their size or specific needs. As a result, we provide everything from enterprise platforms that serve global financial services organizations to software applications that serve individual investment advisors.)

12.22.2008 | MPI Announces Release of New Research Paper
- PRESS RELEASE - MPI's paper entitled Madoff: A Tale of Two Funds demonstrates how advanced returns-based analysis techniques could have alerted investors to potential inconsistencies. Download PDF

Madoff probe extends into offshore funds: report

Madoff probe extends into offshore funds: report

(Reuters) - Federal prosecutors investigating Bernard Madoff's $50 billion fraud are starting to look into the role played by offshore fund operations, the New York Times reported.
Investigators are especially interested in whether Madoff and some of his investors used funds based in offshore tax havens to evade American taxes, the paper said, citing a person who was briefed on the investigation and remained anonymous.
The paper said, according to the person, the likelihood of charities improperly allowing their donors to shift money offshore and foreign banks withholding American taxes on Madoff accounts were also being scrutinized.
According to the paper these include funds linked to the Fairfield Greenwich Group, which lost $7.4 billion of its investors' money to Madoff, Tremont Group Holdings, which had $3.3 billion invested, and several Swiss banks.

Update January 29, the Madoff Case is expanding, there is quite a bit to tell about this guy, his houses, his contacts, the psychology, the warnings, the suspicions, and so on. But we run a blog about the Stock Market and the Economy, and not a tabloid about greedy celebrities or power-hooked royalty.
There is however an interesting post on this blog from January 26th about the Dutch Royal Family being a possible victim of the Madoff scam. (It is still a rumour, and only circumstantial exists until now. This post is in Dutch. http://beurskrach.blogspot.com/2009/01/klopt-het-wat-weekblad-priv-heeft.html )

The Markets today (Dec 15 , 07.00 CET)

Asian Markets substantially higher this morning, European calls point to higher openings.
The Madoff case still trickling through, Investment banks in far East and Europe hit, (Japan, Spain, France, Switzerland). The situation is still opaque but the full effects of this scandal are expected to pop up in the beginning of next year. A few thousand of small and large investors are exposed.

The FED is lowering rates this week by a mere one quarter or one half of a percent.
ECB Chairman Trichet is warning about 'overspending' on the crisis, so do not wait for more ECB cuts for a while.
On the OPEC Meeting in Algeria (Dec 17th) substantial output cuts are expected to be announced. Crude Oil futures are up.
The White House will finally unveil the auto-industry's meager bailout package and emergency loans in the coming days.
Pre-market indicators for the U.S. point to modestly higher openings.
No trading in Fortis shares today after the decision of the Belgian Court late Friday.

The overall sentiment is, that investors do not seem to be deeply shocked by all the bad news or get depressed with the bad news on the horizon. You can't win 'em all. Cheer up! The champaign is bubbling. But don't drink and drive.

The effect of the 'Madoff Mess' on the Markets

On Friday December 12 the news broke that the ex-Nasdaq Chairman Bernard Madoff was arrested and charged with operating a multibillion-dollar Ponzi scheme from his investment advisory business.
The total amount of the fraud is yet unclear but can easily reach 50.- Billion U.S. Dollar which makes it a record amount ever for a Ponzi Scheme.
Bernard Madoff was heavily involved with the $1.5 Trillion hedge fund industry and had wealthy clients from all over the world.
It took a while before the news spread around but already rumors are circulating about funds that will be wiped out in the next future.
With the world stock markets in a shaky condition and the recession deepening we can expect in the days, weeks and months ahead, investors running for the exit and even some 'classic panic scenes' emerging.

This latest affair, 'The Madoff Mess' is beginning to raise seroius questions about the mental health of - generally- very trusted people like; finanicial authorities, stock brokers, bankers, advisors and so on.
Bernard Madoff, an Ex-Nasdaq chairman with obviously the status of a Very Trusted Person (VTP), simply turned out to be a fraud.
At the same time it raises questions about the mental health of the people trusting their money to him.
Good stuff for a book anyway: "The Financial World runned by a Bunch of Egocentric Lolly Loonies"

(Dec 14) Reports are circulating about Swiss Banks being hit for 4 Billion U.S. Dollar by the Madoff Fraud. A fair amount of wealthy and distinghuised instutions from the American East Coast are among the victims as well. The list of victims is growing, not only among the wealthy and powerful.

December 26. What drove Bernie Madoff? (Article on CNN Money)
An intense competitive streak may have fueled the flames of one of Wall Street's greatest frauds.
But inside was the drive of an intensely competitive person.
"There's a need to prove to the world that I am somebody powerful -- I am so intelligent," said psychologist Alden Cass, president of Competitive Streak Consulting, who has counseled and studied Wall Street personalities.


(Reuters) Madoff's alleged $50 billion fraud hits other investors

(CNN Money/Fortune)'Financial psychopaths' wreak havoc
The damage done in cases of Bernard Madoff and Marc Dreier doesn't end with investors.

Wall Street's Latest Downfall: Madoff Charged with Fraud (Time.com)
Bernard Madoff, the former Nasdaq chairman who was charged on Thursday with massive fraud, was long considered to be quirky. Employees at the offices of his eponymously named brokerage firm in midtown Manhattan's Lipstick Building had to follow strict rules for what they kept on their desk. Family photos were allowed but only if they were displayed in a simple black frame.

The Ponzi Scheme

Bernard L. Madoff, 'your friendly uncle'

The Ponzi Scheme is simular to a Pyramid Scheme. It's likely to stay around in good and in bad economic times. Investors should be cautious for investments or investment proposals promising very high yielding returns with little risk.

(From Investopedia)
A fraudulent investing scam that promises high rates of return at little risk to investors. The scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors.

Investopedia Says... The Ponzi scam is named after Charles Ponzi, a clerk in Boston who first orchestrated such a scheme in 1919.
A Ponzi scheme is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers. One difference between the two schemes is that the Ponzi mastermind gathers all relevant funds from new investors and then distributes them. Pyramid schemes, on the other hand, allow each investor to directly benefit depending on how many new investors are recruited. In this case, the person on the top of the pyramid does not at any point have access to all the money in the system.
For both schemes, however, eventually there isn't enough money to go around and the schemes unravel.

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The most recent Ponzi Scheme (still developing). It promises to become the worst in history, an ex-Nasdaq chairman accused of a $ 50 billion dollar Ponzi Scheme.
Ex-Nasdaq chair arrested for securities fraud
Bernard Madoff was arrested Thursday and charged with operating a multibillion-dollar Ponzi scheme from his investment advisory business.

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