Tag: Madoff

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Article: House Hearing: Only Jamie Dimon’s Microphone Mysteriously Malfunctions During Pivotal Questioning

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House Hearing: Only Jamie Dimon’s Microphone Mysteriously Malfunctions During Pivotal Questioning

Pam Martens and Russ Martens, 28 May 2021

CEOs from the six largest banks on Wall Street testified under oath yesterday before the House Financial Services Committee. But only one CEO, Jamie Dimon, had an ear-piercing electronic sound emanate from his microphone, which blocked out the sound of his voice, when he was asked key questions by two separate members of Congress.

The situation was so bizarre that Congressman Juan Vargas, a Democrat from California, said this about the episodes: “It reminded me of the movie ‘Young Frankenstein.’ Every time they said ‘Luther’ the horses would get scared. Every time they said ‘Jamie Dimon,’ the computers would get scared.”

The first episode occurred after Congressman Al Green, a Democrat from Texas, told Dimon that two of the banks previously purchased by JPMorgan Chase had used slaves as loan collateral and at one point, after calling in a loan, the bank actually owned 1,250 slaves. Green asked Dimon: “Will you atone in the form of recompense,” and “what will you do for your banks owning human beings…?” Continue reading “Article: House Hearing: Only Jamie Dimon’s Microphone Mysteriously Malfunctions During Pivotal Questioning”

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Article: Cayman Fund Seeks To Revive $2B Claim Over Madoff Losses

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Cayman Fund Seeks To Revive $2B Claim Over Madoff Losses

Richard Crump, 20 April 2021

A Cayman Islands investment fund urged the highest court for overseas British territories on Tuesday to revive its breach of contract claim against Bank of Bermuda and an HSBC subsidiary for $2 billion in damages as the result of losses from Bernie Madoff’s massive Ponzi scheme.

Primeo Fund said the Judicial Committee of the Privy Council, which sits in London, should overturn a decision by the Court of Appeal of the Cayman Islands that the fund’s claims are barred by the reflective loss principle. That rule prevents shareholders from bringing a claim for personal losses arising from a breach of duty or contract owed to the company they have invested in. Continue reading “Article: Cayman Fund Seeks To Revive $2B Claim Over Madoff Losses”

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Article: Bernard Madoff, criminal financier, 1938-2021

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Bernard Madoff, criminal financier, 1938-2021

Brooke Masters , 16 April 2021

When Bernard Madoff’s Ponzi scheme collapsed in December 2008, $65bn vanished overnight, devastating tens of thousands of small investors, charities and religious groups who continue to struggle to this day.

The former chair of the Nasdaq stock market’s confession that his fabled investment company was “one big lie” came at the depths of the financial crisis and riveted global attention. Amid an alphabet soup of opaque financial products that had crashed the world economy, people could understand this crime.
Continue reading “Article: Bernard Madoff, criminal financier, 1938-2021”

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Article: Where Are They Now: Key Players In The Madoff Case

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Where Are They Now: Key Players In The Madoff Case

Jack Queen, 14 April 2021

Law360 (April 14, 2021, 9:05 PM EDT) — Ponzi king Bernie Madoff’s jailhouse death was all but guaranteed the moment he was sentenced. Before a packed federal courtroom in Manhattan — after the lawyers, victims and Madoff himself had spoken — Judge Denny Chin decided what punishment fit the financial crime of the century: 150 years, the maximum sentence available.

The decision prompted an outburst of cheers from the dozens of victims present. But it was the only joyful moment of a proceeding marked by anguished testimonials from victims, calls for justice from prosecutors, and pleas for mercy by Madoff’s defense team, which had asked for 12 years. Continue reading “Article: Where Are They Now: Key Players In The Madoff Case”

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Article: Madoff Client Ordered To Pay Back $3M In Fake Profits

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Madoff Client Ordered To Pay Back $3M In Fake Profits

Vince Sullivan, 24 March 2021

A client of the notorious Ponzi scheme run by Bernard L. Madoff must return nearly $3 million in fictitious profits it received from the scheme after a New York federal judge found in favor of the trustee overseeing the Madoff fund’s liquidation.

U.S. District Court Judge John G. Koeltl granted summary judgment to Irving H. Picard, the trustee for the Substantively Consolidated SIPA Liquidation of Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff, and ordered JABA Associates to fork over $2,925,000 in payouts it received in the two years before Madoff’s scheme crumbled in December 2008. Continue reading “Article: Madoff Client Ordered To Pay Back $3M In Fake Profits”

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Subject: Bernie Madoff

Subject of Interest

Bernard Lawrence Madoff (/ˈmeɪdɔːf/;[1] born April 29, 1938) is an American former market maker, investment advisor, financier and convicted fraudster who is currently serving a federal prison sentence for offenses related to a massive Ponzi scheme.[2] He is the former non-executive chairman of the NASDAQ stock market,[3] the confessed operator of the largest Ponzi scheme in world history, and the largest financial fraud in U.S. history.[4] Prosecutors estimated the fraud to be worth $64.8 billion based on the amounts in the accounts of Madoff’s 4,800 clients as of November 30, 2008.[5]

Madoff founded a penny stock brokerage in 1960 which eventually grew into Bernard L. Madoff Investment Securities. He served as its chairman until his arrest on December 11, 2008.[6][7] The firm was one of the top market maker businesses on Wall Street,[8] which bypassed “specialist” firms by directly executing orders over the counter from retail brokers.[9]

Full Biography

 

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Article: How phantom shares on Wall Street threaten U.S. companies and investors

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How phantom shares on Wall Street threaten U.S. companies and investors

Lucy Komisar

The Komisar Scoop, 26 March 2020

As stocks are in free fall, a scam run by the big banks/broker-dealers for the benefit of themselves and their hedge fund clients threatens to worsen the situation of large and small American companies and investors.

It’s when the bank/broker-dealers buy stocks, pocket the money and fail to deliver to clients the shares they are supposed to settle through the national stock clearing house. In another industry that might be called embezzling.

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Article: Part 6 Illegal Naked Shorting: The SEC’s Regulation SHO is Intended to Prevent Illegal Naked Shorting, But is Ineffective

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Part 6 Illegal Naked Shorting: The SEC’s Regulation SHO is Intended to Prevent Illegal Naked Shorting, But is Ineffective

Larry Smith

Smith On Stock, 22 May 2019

In previous blogs I traced the history of stock trading from the 1960s when stock certificates and cash were physically exchanged to settle trades to the paper free, totally electronic system that exists today. Instead of owning stock certificates, we now own digital entries located somewhere in the vaults of the inscrutable Depository Trust and Clearing Corporation (DTCC). This electronic system is absolutely critical to the functioning of our capital markets and our strong economic system. However, the DTCC and the prime brokers who own it have made the clearing and settlement system virtually non-transparent. This enables the routine manipulation of primarily but not exclusively, small stocks through illegal naked shorting.

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See All Larry Smith Posts @ SNSS

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Article: JP Morgan Chase, Bernie Madoff’s $64.8 Billion Ponzi Scheme and Crime on Wall Street

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JP Morgan Chase, Bernie Madoff’s $64.8 Billion Ponzi Scheme and Crime on Wall Street

Dennis M. Kelleher, 06 December 2017

As the headlines have made clear for years, JP Morgan Chase has a long rap sheet of illegal conduct and, although overlooked, it includes enabling Bernie Madoff’s $64.8 billion Ponzi scheme, the largest in history, which caused net losses of more than $17 billion and untold human wreckage.

Six years ago on December 11, 2008, federal agents arrested Madoff, the ringleader of the Ponzi scheme — as a coda to an age of regulator and prosecutorial incompetence and neglect, Madoff was not caught; he was arrested after turning himself in. This happened in the middle of the largest financial crash since 1929, when the country’s economy was collapsing and when a second Great Depression was a very real possibility. Although not responsible for the crash and collapse, Madoff in handcuffs was in some ways the face of Wall Street greed and criminality.

However, that is a false and misleading picture of crime on Wall Street.

After all, how could this one guy possibly pull off such a crime and at that scale and for so long? He couldn’t have and didn’t. Like most substantial illegal and criminal financial activities, Madoff had a very close relationship with a big Wall Street bank: JP Morgan Chase, the country’s largest bank. Given the focus on the crash and economic calamity in 2008 and JP Morgan Chase’s years-long efforts to prevent any information from being publicly disclosed, JP Morgan’s role in enabling this massive crime wasn’t publicly known for years.

That veil of secrecy ended when a compliant was filed by a court appointed trustee to recover funds for the thousands of injured investors, as summarized in this article: “Trustee: JP Morgan Abetted Madoff.“ In the complaint, the trustees alleged that JP Morgan Chase “was at the very center of the fraud, and thoroughly complicit in it.” JP Morgan Chase, the complaint stated, “turned a blind eye to” Madoff’s fraud.”

Madoff’s decades long fraudulent scheme resulted in the loss of “$64.8 billion in paper wealth and at least $17.5 billion in cash losses.“ The second, third and fourth largest Ponzi scheme losses in history collectively only amounted to 60% of what Madoff stole. While this was happening, JP Morgan made hundreds of millions of dollars from “servicing” Madoff’s accounts and saved itself another $276 million invested with Madoff by remarkably well-timed withdrawals, conveniently just before the scheme was revealed. All of this is documented in the complaint.

Moreover, there is clear information that JP Morgan Chase, including senior officials in compliance and elsewhere, knew about the Ponzi scheme long before Madoff decided to turn himself in. In fact, it appears that JP Morgan Chase “ignored red flags for about 15 years“ that Madoff used JP Morgan Chase accounts to run his fraudulent scheme. Just one egregious example: the complaint quotes (p. 31+) from a June 15, 2007 email from John Hogan, Chief Risk Officer, Investment Bank, JP Morgan Chase to Matt Zames, a senior executive and head of several business lines, stating:

“For whatever its worth, I am sitting at lunch with Matt Zames who just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a [P]onzi scheme….”

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Article: David Dayen Series on Naked Short Selling

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David Dayen, a persistent chronicler of how oligarchs exploit the financial system to enrich themselves at the expense of others, writes about Chris DiIorio, a stock analyst who for 10 years has obsessively investigated how exactly he came to lose $1 million on one penny stock. A remarkable story ensues.  All article in The Intercept.

The Money is Gone (22 September 2016)

Big Players, Little Stocks, and Naked Shorts (23 September 2016)

Naked Shorts Can’t Stay Naked Forever (24 September 2016)

Calling the SEC (25 September 2016)

Turning Up Like A Bad Penny (26 September 2016)

Were Paper Losses the Goal All Along (27 September 2016)

The Half Billion Glitch (28 September 2016)

 

 

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Article: Is The Federal Reserve Using Money-Laundering Techniques To Cleanse Banks’ Balance Sheets?

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Is The Federal Reserve Using Money-Laundering Techniques To Cleanse Banks’ Balance Sheets?

Lawrence Hunter

Forbes, 29 October  2012

Drug lords, terrorists and shadow-government operators (but I repeat myself) use third party intermediaries to cool off and sanitize hot, dirty, and therefore useless money into pristine-clean and productive money that can be used in legitimate commerce. It’s called money laundering.

Characters operating in the shadows also use a form of reverse money laundering to defile clean money or redirect dirty money while masquerading its source so it can be siphoned away, re-channeled and put to use financing illicit activities such as terrorism and off-the-books, shadow-government operations (but I repeat myself, again) that Congress won’t authorize or fund. Think of it as repatriating dirty money and expatriating clean money.

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Article: Heist of the century: Wall Street’s role in the financial crisis

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Heist of the century: Wall Street’s role in the financial crisis

Charles Ferguson, 20 May 2012

Bernard L Madoff ran the biggest Ponzi scheme in history, operating it for 30 years and causing cash losses of $19.5bn. Shortly after the scheme collapsed and Madoff confessed in 2008, evidence began to surface that for years, major banks had suspected he was a fraud. None of them reported their suspicions to the authorities, and several banks decided to make money from him without, of course, risking any of their own funds. Theories about his fraud varied. Some thought he might have access to insider information. But quite a few thought he was running a Ponzi scheme. Goldman Sachs executives paid a visit to Madoff to see if they should recommend him to clients. A partner later recalled: “Madoff refused to let them do any due diligence on the funds and when asked about the firm’s investment strategy they couldn’t understand it. Goldman not only blacklisted Madoff in the asset management division but banned its brokerage from trading with the firm too.” Continue reading “Article: Heist of the century: Wall Street’s role in the financial crisis”

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Article: SEC under Schapiro struggles to turn around amid political, financial head winds

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SEC under Schapiro struggles to turn around amid political, financial head winds

David S. Hilzenrath

Washington Post, 7 October 2011

Mary L. Schapiro took over a discredited SEC in early 2009 and vowed to rebuild it.

She promised tougher enforcement — “war without quarter” on financial fraud. Modernized rules to keep up with Wall Street. And a new, more effective organization.

Her tenure at the federal agency responsible for protecting investors and policing markets offers a Washington lesson: Even when epic crises create a sense of urgency, it is tough to tighten the reins on powerful industries. Dramatic results can prove elusive.

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Article: Whistle. Then Worry and Wait.

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Whistle. Then Worry and Wait.

Edward Wyatt

New York Times, 9 October 2010

Sitting in a Minneapolis mansion and listening to a charismatic investment manager describe a currency trading system that kept earning handsome returns year after year, Arthur F. Schlobohm IV was certain he had stumbled onto a Ponzi scheme.

A longtime trader who started running tickets on the floor of the New York Stock Exchange as a teenager, Mr. Schlobohm, known as Ty, knew that Minneapolis, his home for nine years, was too small a town for a $4.4 billion investment fund to have escaped his notice.

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