Many of Madoff’s victims sent impassioned letters asking the judge to give Madoff as much time in prison as possible. Some of them have even asked for a chance to speak at the June 29 sentencing hearing.
The letters are wrenching because many of Madoff’s victims are elderly and retired who have lost everything to Madoff’s greed.
For more, including a link to these moving letters, click here.
Tags: madoff, protect investments, securities fraud, stock loss
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Earlier this week, Wells Fargo (along with the Bank of America, regarding Auction Rate Securities) reached agreements to settle securities fraud charges with state and federal regulators. Wells Fargo’s settlement involves its Boston-based mutual fund Evergreen Investment Management. Wells Fargo will pay $40 million dollars in the agreement with the Securities and Exchange Commission and the Massachusetts Securities Division. According to the regulators, Evergreen lied to investors about the value of securities it sold and disclosed this information to a select group of people. Although the behavior occurred while Evergreen was owned by the Wachovia Group, Wells Fargo has to bear the cost.
The value of the Evergreen Ultra Short Opportunities Fund, a group of mortgage-related securities that Evergreen controlled, was inflated 17% between February 2007 and June 2008, the SEC reports. The SEC states that its valuation committee learned of this when portfolio managers knew about problems regarding mortgage-backed securities but knowingly failed to disclose the mortgage-backed issues. Mutual funds must treat its clients equally, and hence, when Evergreen repriced the holdings in the fund, they informed only a few investors who were able to significantly reduced their losses.
This is a classic example of preferential treatment that is ever present in our market today. As the financial crisis looms, it is hard to see when such offenses will become less frequent, to say the least.
For more information, click here.
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Now more ‘feeder fund’ investors are suing Madoff along with others. These two feeder funds are looking to recoup approximately $3.5 billion in alleged losses. Kingate Global Fund Ltd. and Kingate Euro Fund Ltd. filed their lawsuit in US District Court in Manhattan this week.
The lawsuit alleges that “[r]eportedly, over $3 billion was invested in Kingate Global and Kingate Euro, and virtually all of those moneys were funneled to Madoff.” A few months ago these two Kingate funds were sued by the trustee of Madoff’s investment company. The trusteee, Irving Picard sued to recover $255 million withdrawn from Madoff’s firm between October and November 2008. Picard’s lawsuit named fund manager Kingate Management Ltd.; Grosso’s FIM Advisers LLP, which acted as a consultant to the funds; and others as defendants.
The feeder fund lawsuit is an attempt to deflect the allegations made by the Madoff investment firm trustee Irving Picard that these two funds illegally profited from their association with Madoff.
The feeder funds will try to defend by saying they were victims too.
Time will tell, but if these money managers are half as astute as they (used to) like the public to believe I am not sure they will make a strong case.
Tags: madoff, ponzi scheme, protect investments, securities fraud, stock fraud, stock loss, sue broker
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The Securities and Exchange Commission charged an investment adviser in Armonk, N.Y for stealing more than $6 million in investor funds for himself. He exploited clients that were mentally ill and handicapped, the SEC reports.
Matthew D. Weitzman used clients money for his own personal use by selling securities through clients’ accounts and transferring their money to a personal bank account. Clients received false account statements, often showing false account balances and inflated securities. Weitzman also engaged in broker-dealer foul play as letters would be fabricated by Weitzman on behalf of his clients to complete money transfers.
Weitzman also took money from his clients’ Individual Retirement Accounts (IRAs) in order to maintain a minimum amount of cash to engage in the unauthorized transfers. Weitzman chose clients from AFW Asset Management, the company that he co-founded based in Purchase, N.Y, to exploit. He targeted clients that were less likely to check their account statements, like $430,000 total transfers from a client that was terminally ill. He took $85,000 from said client in two unauthorized transfers from the widow of the client.
Weitzman has been accused violating many industry rules click for more detail here.
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The Fairfield Greenwich Group is the latest target of the trustee’s clawback lawsuits. This time he is looking to get back $3.2 billion from the fund which was one of the biggest investors in the Madoff ponzi with more than $7 billion.
http://www.nytimes.com/2009/05/19/business/19madoff.html?ref=business
Tags: ponzi scheme, stock fraud, stock loss, sue broker
Posted in Business Disputes, Consumer Protection, Scams and Schemes, Securities Related Issues | No Comments »
While trustee ostensibly won’t be going after the principal invested by those who got out of Madoff’s ponzi scheme before it collapse, they are going after profits in ‘claw back’ suits. This type of fraud and similar types of stock fraud are all too common and the problem is you just don’t know when or where the next one will be. Stock fraud claims against broker dealers are potentially easier to pursue because often the broker dealer has some liability.
http://www.nytimes.com/2009/05/13/business/13madoff.html?_r=1
Tags: madoff, ponzi scheme, stock fraud
Posted in Consumer Protection, Scams and Schemes, Securities Related Issues | Comments Off
Well, another supposedly strong and trustworthy company is being revealed as a ponzi scheme. This one ‘only’ involved about $8 billion and she was ‘only’ indicted for conspiracy and obstruction of justice. Is it just me or does it seem like the ones you should be able to trust in the financial markets you can’t trust.
Tags: ponzi scheme, protect investments, recession, securities fraud, stock fraud, stock loss, sue broker
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The SEC charged Pang with structuring charges for his scheme to make many transactions just below federal reporting requirements to gain access to huge sums of money without telling the government. Apparently kept the cash at his house until he bought gold bars with it (really!). The SEC is also alleging that he ran a huge ponzi scheme.
Tags: madoff, ponzi scheme, protect investments, recession, securities fraud, stock fraud, stock loss, sue broker
Posted in Business Disputes, Consumer Protection, Scams and Schemes, Securities Related Issues | No Comments »
B of A shareholders voiced their view today by removing Ken Lewis as chairman of the board of directors. He remains as CEO. Time will tell if he stays as CEO given the resounding vote of ‘no confidence’ the shareholders gave him as chairman. This is an interesting turn of events for a high-flyer who really seemed to have a chance to make B of A the next Citigroup (but is that a good thing or a bad thing?).
American business cycle includes periods of time when companies gather other businesses under their umbrella to gain ’synergies’ and create a whole more valuable than the sum of its parts and then when the synergies don’t show up on cue guess what? They break up the company because the parts are worth more than the whole.
Tags: Bank of America, Kenneth Lewis
Posted in Consumer Protection, International, Securities Related Issues | No Comments »
In yet another astonishing display of hubris, Citi has asked the government of special dispensation to pay its already overpaid energy-trading subsidiary executives huge bonuses in one form or another. What? This is ridiculous. Sure, the latest numbers from Citi could look worse, but really, guys, “retention bonuses?” Now is not the time and Wall Street is not the place.
Tags: bonuses, Citi
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