Top 15 For 2008 (No. 8): Ponzi Scheme Renamed 'The Madoff'
StreetInsider.com has put together its 'Top 15 For 2008' which chronicles our view of the most significant news on Wall Street during the tumultuous year.
Number 8: Ponzi Scheme Renamed 'The Madoff'
We were nearly at the end of one of the worst years in stock market history, confidence in the system was running at an all time low, then - WHAM! Bernard Madoff, a well-respected money manager, confessed to running a Ponzi scheme of epic proportions.
On December 11th, Wall Street was shocked to learn that well-respected money manager Bernard Madoff was arrested for running a self-confessed "giant Ponzi scheme." In its complaint, the SEC alleged that Madoff told two high level employees that his business was a fraud. He told these employees that he was "finished," that he had "absolutely nothing," that "it's all just one big lie," and that it was "basically, a giant Ponzi scheme." Madoff had for years been paying returns to certain investors out of the principal received from other, different investors. Madoff estimated the losses from this fraud were at least $50 billion.
The tentacles from Madoff's scam proved far-reaching. Many fund of funds invested and collected fees from falsified returns. Wealthy families and charities, many in the Jewish community, also invested heavily with Madoff. Madoff also had large investments from international firms. The money is now mostly gone and they are hoping SIPC coverage and asset searches will get a little bit back.
Some big-names that lost money with Madoff included: Fairfield Sentry Fund, Tremont Group, Mort Zuckerman's Charitable Trust, Ezra Merkin's Ascot Partners, New York Mets owner Fred Wilpon, Steven's Spielberg Wunderkinder Foundation, NYU, Former Philadelphia Eagles owner Norman Braman, Carl and Ruth Shapiro.
Proving what a lying, cheating, narcissistic schmuck he was, Madoff was out raising more money to keep his scheme going until the bitter end. He knew full well that the people he was taking money from would never see it again.
Inexcusably, the Madoff scam happened right under the SEC's nose. A handful of whistleblowers tried to alert the agency to the suspected fraud years ago, but the agency didn't follow-up on the leads. Specifically, Harry Markopolos sent documents to the SEC as early as 1999 alleging fraud against Madoff Investment Securities, LLC.
Madoff's scam was another major blow to the already fragile U.S. financial system. Many were also left wondering how many other Madoff-like scams are waiting in the wings.
Stocks Mentioned
Related Entities
Comments
Pictet &Cie
Pictet & Cie. – they claim the “Rolls Royce ” of swiss banks. Swiss Banks or more correctly Swizz banks. Swizz. ---- “ a fraud ” or “ a great disappointment.” Fraud. ---“ an intentional deception or dishonesty.”— “a crime.” Crime. ---“ an act committed or omitted in violation of a law.” Serious Crimes . Conspiring to pervert the Course of Justice. Perverting the Course of Justice. Contempt of Court.
Pictet & Cie .
The Financial Services Authority . (FSA. ) The F.S.A. investigated our complaints for eighteen months , then when pressed by our M.P. They closed the file and told him it was not within their remit . (1) They had evidence to prove that crimes had been committed by one of the firms under their supervision . This same firm had already had a previous breach . (2) They state actual findings , - lack of supervision , lack of due diligence and money laundering . (3) The case was sent to Enforcement numerous times but no action was ever implemented . Even after they concluded that Pictet had a “rogue element” in their London office . (4) The F.S.A. were also guilty of perverting the course of justice for they knew full well that Pictet were lying and were guilty of numerous offences. (1). It is a criminal offence for a bank to knowingly act for an undischarged criminal bankrupt in so far as it seeks to assist that criminal bankrupt in the fraudulent movement of monies .( Money laundering .) (2) It is a criminal offence for a bank to lie to the police and the bankrupts trustee in bankruptcy in so far as any knowledge of , or dealings with the bankrupt was refuted . (3) A bank can be guilty of contempt of court if it fails to comply fully with the Courts order for discovery . (4) The banks contempt is further compounded if it fails to address its error after it is specifically drawn to its solicitors attention . ( Monty Raphael.) (5) It is a criminal offence under the financial services act to seek to destroy evidence that might be relevant to an investigation . (6) It is a criminal offence not to relinquish control of funds to the trustee immediately the fact of the bankruptcy is drawn to the banks attention . (7) It is a criminal offence to lie or otherwise obfuscate the lawful and proper Enquiries of the F.S.A.
( Covering up crimes.)
Pictet & Cie. Bank -Switzerland. Financial Services Authority . ( U.K.) Pictet & Cie Bank . ( Pictet Asset Management ). ( Jan . Updates.) The bank and its officials deliberately withheld crucial documents requested under a High Court order .The bank and its officials deliberately withheld evidence from the Police , and one of its account managers Susan Broadhead gave a false witness statement to the police . Another one of its managers Nicholas Campiche ( Now Head of Pictet – Alternative Investments.) concocted a letter pretending to be a client and closed his account . The senior partner ( Ivan Pictet .) sought to have numerous documents destroyed , along with those copies in their London office of P.A.M. . Initially stating they were forgeries then their lawyers ( Peters & Peters - - and barrister Charles Flint .Q.C later had to admit in Court that they were genuine . *** We thank --. David Cameron. M.P. (Canary Wharf speech.) Dec.15th 2008. “ Bankers who behave irresponsibly should face professional consequences.” “ And ,for sure, if anyone is found to have behaved criminally they must be prosecuted. “ The F.S.A and the Serious Fraud Office should be following up every lead, investigating every suspect transaction.” “ we need to make it 100% clear – those who break the law should face prosecution.” “ that we make sure we root out any wrongdoing that may have happened,whoever is involved, however high or well connected they may be.” “ insisting that City executives should be prosecuted for any criminal wrong-doing.”
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
Swizz banks
peter humphries on May 4, 2009 06:43 AMPictet & Cie.- claim they are the “Rolls Royce”of swiss banks. Swiss Banks or more correctly Swizz banks. Swizz. ---- “ a fraud ” or “ a great disappointment.” Fraud. ---“ an intentional deception or dishonesty.”— “a crime.” Crime. ---“ an act committed or omitted in violation of a law.” Serious Crimes . Conspiring to pervert the Course of Justice. Perverting the Course of Justice. Contempt of Court. The Establishment “ Cover up crimes”. The ‘Doyens’ of the establishment.’ ( Ivan Pictet and Monty Raphael.) Ivan Pictet. Managing partner in Pictet & Cie Bank .--- Switzerland. President of the Geneva Financial Centre. World Bank.committee member. United Nations. Investment Committee member, Vice President – Global Humanitarian Forum. Member of the Henokiens. Blackstone Group --- Board Member. Past- President – Geneva Private Bankers association. Past –President – Geneva Chamber of Commerce and Industry. Monty Raphael. Quote.” ---- Doyen of U.K. Fraud lawyers. Consultant & Head of Fraud and Regulatory Dept. Member of Board of Directors of the Fraud Advisory panel. Member of the Law Society of England & Wales. International Bar Association Member. Past President—London Criminal Court Solicitors Association. Past Chairman ---of Anti Corruption Committee. Founder of Business Crime Committee of the International Bar Association.