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Madoff Workplace Allegedly Rife with Cocaine, Sex

Oct 22, 2009 @ 09:16 AM By Kerry Massaro,

And the saga continues. CNN's Chloe Melas reports on a recent lawsuit filed by former Madoff investors claiming that "Madoff's workplace was rife with cocaine and sex." The 264-page law suit claims Madoff "financed a cocaine-fueled work environment and a "culture of sexual deviance."" The complaint alleges Bernard Madoff Investment Services was known by insiders as the ""North Pole", in reference to the excessive amount of cocaine use in the work place." The law suit also
claims that "Madoff diverted money to his London, England, office when he believed federal authorities were closing in at home."

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Penson's Letter To SEC On Matt Taibbi

Oct 7, 2009 @ 04:29 PM By Kerry Massaro,

Check out this developing story on Penson Financial Services, which was accused of a serious securities law violation (approving a large naked short) by Rolling Stone columnist Matt Taibbi. Penson wrote a letter to the SEC denying any wrong doing.

Here is a story that appeared in The Business Insider that recounts what happened.

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Vanity Fair, Madoff and the Wall Street & Tech Connection

Jun 10, 2009 @ 04:20 PM By Cristina McEachern Gibbs,

It’s not very often that I read my Vanity Fair and personally recognize a name or even know anyone quoted in the articles. The actors and famous types, of course, but not so much anyone in my circle.

But this past weekend as I hunkered down to read about cover guy Johnny Depp and then the Madoff sons I came across a very familiar name.

The article, “Did the Madoff Sons Know?” in the July issue explored whether or not Mark and Andrew Madoff might or might not have known about their fathers Ponzi scheme.

In the piece there was an attribution to Wall Street & Technology and specifically Anthony Guerra’s article featuring the Madoff family operation back in July of 2000.

Wall Street & Technology is Advanced Trading’s sister publication and at the time the article was published myself, Kerry Massaro (now Editor-in-Chief at AT) and Anthony were all working together.

And of course at the time Bernie Madoff was a revered Wall Street titan. Back then Madoff may have been featured in any number of financial publications but today he is featured in even more. From Vanity Fair to Golf Magazine, no magazine can ignore the salacious tale of Bernie and his Ponzi scheme.

Reading the Vanity Fair article it seemed to hint that the Madoff sons had to at least suspect something was up but might have left it at that as they were so ensconced in a certain lifestyle their family and business had created.

Then reading the WS&T article, entitled, “The Madoff Dynasty,” which focused on the family angle to the business it paints a very different picture of the Madoff's in the days before Bernie's scheme became public.

And it makes me wonder if others did really know what was going on behind the scenes. Guerra even points out in the first paragraph that Ruth, “helped with some bookkeeping.”

And Mark said of Bernie and the family in the article, "All of his family members grew up with this being our lives. When it is a family operated business you don't go home at night and shut everything off, so you take things home with you, which is how all of us grew up.”

I guess we may never find out how much or little the sons or Ruth for that matter knew but looking back and reading interviews with Bernie and the Madoff family does provide some interesting fodder.

In the days before the public knew something was amiss it seemed the family was quite close and would potentially know a lot about each other’s business. Now of course that is not the case.

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Madoff's Prison Number Wins NY Lottery

Mar 25, 2009 @ 11:12 AM By Kerry Massaro,

At least someone--other than the conman himself--- actually made money "investing in Madoff." The Daily News reported yesterday that a Queens construction worker used the swindler's prison number to play the lottery and won $1,500.

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The Curious Case of J. Ezra Merkin

Feb 16, 2009 @ 11:12 PM By Ivy Schmerken,

Court papers filed by New York University against New York money manager J. Ezra Merkin reveal that Merkin, who invested $2 billion with Bernard Madoff, was taking investment advice from a convicted felon.

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Madoff Hearing: SEC Inspector Says Possibility SEC was Complicit

Jan 6, 2009 @ 10:18 AM By Cristina McEachern Gibbs,

Congress was technically not in session yesterday but that didn’t stop Representative Paul Kanjorski, a Democrat from Pennsylvania, from convening a meeting of the House Financial Services Committee on the alleged $50 billion Ponzi scheme perpetrated by Bernie Madoff.

During the meeting many lawmakers were openly calling for regulatory reform, saying they had lost confidence in the Securities and Exchange Commission. On hand to testify were David Kotz, the SEC Inspector General; Stephen Harbeck, president of the Securities Investor Protection Corporation (SIPC); and Allan Goldstein, a Madoff investor who lost his life savings.

Kotz was adamant that his office would diligently undertake an investigation of what happened within the SEC when dealing with the Madoff complaints which began years ago, as well as why the many red flags raised by Madoff’s operation went unchecked.

One lawmaker asked Kotz how sure he was that there were not people within the SEC that were complicit in the fraud and enabled it to happen, to which he replied he wasn’t sure. Kotz responded, “On its face it certainly looks as if there may be that possibility.”

But one thing glaringly missing from yesterday’s meeting was any sort of discussion addressing how Madoff was able to pull off his fraud and how he was able to continue it for so long. There was no focus on where the money Madoff purportedly stole went, or who was involved if anyone else.

There was mention that the Madoff broker-dealer arm and the investment advisory business were technically the same legal entity, and that obviously the broker-dealer arm had filed false reports with the SEC and with FINRA over the years involving it in the fraud. But no real talk about how he
defrauded all of his investors and where the money might be.

By now we all know what the “red flags” were that should have tipped off the SEC and/or FINRA to Madoff’s fraud. The small accounting firm, with one accountant for a $17 billion client; the steady positive returns even in economic downturn; the complaints raised and articles written about the supposed Ponzi scheme dating back to 1999, and the list goes on.

But how did he actually do it? Where did the money really go and who was actively involved in the fraud?

The Congressional meeting was definitely a platform for lawmakers to push for regulatory reform and what many called “a 21st Century regulatory scheme for the 21st Century.”

I’m interested in this as well, and will even be focusing a feature for the next issue of Advanced Trading on regulatory reform and what will the potential new SEC look like.

But as a trading industry observer I’d really like to know the details of how Madoff pulled it off, both in terms of the level of deception and his trading operations.

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Madoff: "The Owner's Name is On the Door"

Dec 12, 2008 @ 10:40 AM By Kerry Massaro,

As everyone in the industry must know by now Bernard Madoff, founder of Bernard Madoff Investment Securities has been arrested for fraud. He allegedly admitted that his firm is just a giant Ponzi scheme---one that lost $50 billion in investors money.

It’s ironic that it says this on the firm’s Web site, “In an era of faceless organizations owned by other equally faceless organizations, Bernard L. Madoff Investment Securities LLC harks back to an earlier era in the financial world: The owner's name is on the door. Clients know that Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm's hallmark.”

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