CRIME FAMILY ????
This is London
THE WIFE of Bernard Madoff, the man at the centre of the $50billion Ponzi investment fraud, is coming under scrutiny from investigators as to how much she knew about his business and whether she helped him to raise money from their social network of wealthy individuals.
Ruth Madoff was regularly seen with her husband, entertaining at their three multi-million-dollar homes and the six golf clubs of which they were members.
She accompanied him to charity dinners, often among the elite Jewish fraternity in New York, and is a co-trustee of the $19million Madoff Family Foundation.
She has not been charged and her lawyer Ike Sorkin said: "We are in no position to tell the investigators what to look at."
The scale of the Madoff network is enormous, with close links to the No1 Spanish banking family, the Botins.....
....New York investigators are keen to find out exactly how much Mr Madoff's two sons, Mark and Andrew, knew about his Ponzi scheme.
It is reported that they blew the whistle on him to the FBI after their father told them he had lost $50billion.....
....a New York judge ordered that all the US operations of Bernard Madoff Investment Securities should be shut down and liquidated.
Madoff claimed to investigators when he was arrested that he had lost $50billion and that there was only about $300million left in what is turning out to be the biggest financial scam in history......
On Wall Street
How did Bernard L. Madoff get away with running a suspected $50 billion Ponzi scheme for decades? His own vanity and that of many of his clients played a starring role, say experts. A former NASDAQ chairman and high-profile presence on Wall Street since the 1960s, Madoff created an elite reputation and recruited clients through exclusive country clubs in the wealthy communities in Boston, Greenwich, Conn., and Palm Beach, Fla. Investors and philanthropists felt honored to get into Madoff's hedge fund that was "invitation only."
"My instinct tells me that this is not about wealth," says Randi Grant, a senior-member of the AICPA and partner of Berkowitz Dick Pollack and Brant, a CPA firm based in Fort Lauderdale, Fla. "He was a man with an ego and a panache and he wanted to keep it going. When I started working with wealthy families in the mid '90s, I used to see his name all over the place as the advisor to the rich and famous." Grant had clients who invested in Madoff's funds through partnerships. "People came to us and it was like they had been given a business sprinkled with fairy dust when they were able to get into his funds. They thought that they were chosen," she says......
.....A second factor in Madoff's making off with billions in client money was the fact he as both fund manager and broker-dealer, he was overseeing his own operations. "The broker-dealer was self-clearing so there was no oversight by a larger firm," says Robert Heim, a partner at law firm Meyers and Heim in New York City and a former assistant regional director at the SEC. "He was overseeing himself, there was no transparency."
Compounding matters was the fact Madoff's chief compliance officer was his son, which isn't inherently a problem but can be dicey. "Normally a chief compliance officer would look very closely at the returns and where they were coming from," says Heim. The ponzi scheme alleged here is a fairly basic fraud and would have been detected."Whether or not the Madoff sons who worked in the firm had any knowledge of the ponzi scheme, some experts speculate that they turned their father in when the jig was clearly up in a family bid for them to save themselves.
According to Ernest Badway, partner at Rothschild and Fox in Roseland N.J. and New York, and a former SEC prosecutor, the SEC was on to Madoff in the early 1990s. "In 1992 or 1993, the SEC had some examiners in there who raised some serious questions about whether or not there was a ponzi scheme going on. But counsel convinced SEC not to bring an action against him." Questions again resurfaced in a Baron's article in 2001, but that too, was dropped......
MORE:
AS the financial centres in New York and London continue to grapple with the enormity of Bernie Madoff's $50 billion scam, a single question was increasingly being heard: is there anything left?
Across America, small investors, corporate high rollers and the monied elite wait anxiously to hear if any of the cash they gave Madoff survived his world record-breaking fraud. They were joined by two British banks who are in for £1 billion between them, the City's biggest hedge fund, Man Group, Nicola Horlick's Bramdean Asset Management and fund manager Arpad Busson, among others.
They all want to know what happened to their money. Madoff is out on $10 million bail, posted by his wife Ruth, and he was spotted last night in the window of his duplex on Manhattan's East 64th Street, smoking a large cigar. Understandably, his investors are asking how much Madoff squirrelled away for himself.
Cut to a quiet corner of Mayfair and a set of offices over a smart art gallery. Here, in Berkeley Street, is the headquarters of the US investment veteran's London arm, Madoff Securities International. Compared with his huge Lipstick Building in midtown Manhattan, 12 Berkeley Street is a modest, discreet address. That's exactly how Madoff likes it. A source told the Standard that this anonymous base in Mayfair is Madoff's "dynastic piggy bank".
He kept around £80 million in cash in the London firm and used it to fund deals to benefit himself, his wife Ruth and sons Mark and Andrew. The Berkeley Street office is a trading operation, which, by the standards of Madoff's fraud, appears to handle modest sums.But by the standards of even wealthy families it is a powerful money-making tool, worked by a hand-picked staff of 28 including top analysts and investment specialists.
HSBC's massive exposure to the alleged Ponzi scheme run by Bernard Madoff will add to the pressure on the bank to seek a major fundraising, analysts said today.
The banking giant has admitted it was exposed to Madoff to the tune of $1 billion (£667 million), making it one of the worst-hit of the big European banks.
CLSA Asia-Pacific Markets said in a note to clients today that the bank may seek to raise $14 billion as the scandal added to the problems it faces of rising loan defaults in the US and the UK.
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