Article: Assets recovered from Tom Petters Ponzi scheme reach $722 million

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Assets recovered from Tom Petters Ponzi scheme reach $722 million

Dana Thiede, 15 June 2021

MINNEAPOLIS — A bankruptcy trustee’s search to recover assets linked to one of the largest financial crimes in Minnesota’s history has netted $722 million.

Doug Kelley says his work to collect assets from Tom Petters’ $1.9 billion Ponzi scheme is nearly done, 13 years after the search began.

Petters, now 63, was indicted in 2008 on multiple counts of mail fraud, wire fraud, money laundering and conspiracy for operating a scheme which spanned 26 countries, including the the Cayman Islands, Germany and Switzerland. Continue reading “Article: Assets recovered from Tom Petters Ponzi scheme reach $722 million”

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”

Article: China Bank Unit Faces Ponzi Scheme Suit Over $46.5M Loss

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China Bank Unit Faces Ponzi Scheme Suit Over $46.5M Loss

Emilie Ruscoe, 16 April 2021

A Canada-based investment firm has sued the Industrial and Commercial Bank of China Financial Services LLC in New York state court, accusing ICBC of looking the other way while an alleged Ponzi schemer used her accounts there to orchestrate a $100 million investment scam.

In its complaint filed Thursday, SureFire Dividend Capture LP sought at least $46.6 million that it, and its predecessors, invested in liquid hedge fund Broad Reach Capital LP, which was run by former broker Brenda Smith. According to SureFire, ICBC, a U.S. subsidiary of the state-owned Industrial and Commercial Bank of China Ltd., was the bank that was designated to serve as Broad Reach’s “clearing broker” for the unique “dividend capture” options trading strategy that Broad Reach used. Continue reading “Article: China Bank Unit Faces Ponzi Scheme Suit Over $46.5M Loss”

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”

Article: LA-Based Actor Charged With Running $227 Million Ponzi Scheme

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LA-Based Actor Charged With Running $227 Million Ponzi Scheme

TYLER DURDEN, 08 April 2021

Zachary Horwitz, a little known LA-based actor, has been arrested by the FBI this week and was charged with running “an enormous ponzi scheme” wherein he represented that he had a successful film distribution company.

The reality was that the actor – who has had some roles in small films – was cheating his investors out of $227 million and using most of the money to fund his own lifestyle, according to the NY Post. Horwitz also “used investor funds to pay in cash for a $5.7 million home in Los Angeles’s Beverlywood neighborhood,” the Wall Street Journal added. Continue reading “Article: LA-Based Actor Charged With Running $227 Million Ponzi Scheme”

Article: GameStop stock surge lingo: Here’s what Reddit’s WallStreetBets vocabulary means

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GameStop stock surge lingo: Here’s what Reddit’s WallStreetBets vocabulary means

Katie Conner, 19 March 2021

Reddit’s community, WallStreetBets, is still assisting in the rise of GameStop’s stock, which is currently sitting at $272 per share and even hit an all-time high last week. Reddit users are battling it out with Wall Street to keep GameStop’s stock prices soaring while Wall Street expected a crash. Small investors are using Reddit communities to drive “meme stocks,” causing short sales and And it’s not just GameStop. Other companies, like AMC and Nokia, have also been affected by the coordinated surge.

No, this doesn’t mean you should necessarily drop everything and fully invest in the stock of the moment. Some are calling the market manipulation a “Ponzi scheme,” and the stock price will likely even out once the hullabaloo dies down.

In fact, broker TD Ameritrade restricted trading of the GameStop and AMC stocks on Jan. 26 and continues to post an advisory note to clients about market volatility. Trading app Robinhood followed suit on Jan. 27 in response to the runaway growth — the company got itself into trouble by restricting stock trades and will be closely reviewed by the SEC (It’s currently limiting buys on AMC and GameStop stocks). The White House has said it’s monitoring the situation.

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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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