Talk:Bernie Madoff

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Luxembourg [change] The fund “Lux-Alpha” and “Lux-Invest” of the Swiss UBS and “subject” of the British HSBC, who were involved in Madoff, were operated under Luxembourg law. [71] Luxalpha, Luxinvest and Herald Fund Luxembourg had in the meantime the share redemption exposed. According to the Luxembourg bank supervision CSSF total of 16 funds had exposed as a result of engagement with Madoff the share redemption. [72].

The “Lux SICAV-Alpha” was liquidated by order of the Luxembourg financial supervisory authority CSSF. [73] By order of the CSSF, the “Herald (Lux) SICAV” liquidated. [74] Another fund in Luxembourg, the Luxembourg Investment Fund-US Equity Plus from a subsidiary of Swiss UBS was sanctioned by the CSSF, as the fund by Madoff Investments had suffered heavy losses. The legal closing of the fund was provided. [75] After Luxalpha Herald and was liquidated in May 2009, the Luxembourg Investment Fund UBS. [76]

The Luxembourg public prosecutor has taken account of the two funds and Luxalpha LuxInvest investigation into the branch of UBS in Luxembourg. It should have been committed include falsification of documents. UBS Luxembourg was aware in 2005 of the dual role as fund manager and Madoff Fondsunterdepositär what would have been prohibited in the Grand Duchy of Luxembourg concerning the conflict of interest [77].

Switzerland [Edit] Banque Benedict Hentsch, the Swiss Fairfield Partners SA, based in Geneva announced that it had invested 56 million Swiss francs (47.5 million U.S. dollars) of their customers Madoff. [78] According to this report are Carl and Ruth Shapiro, major donor for the Museum of Fine Arts, but also the Brandeis University and the affected Beth Israel Deaconess Medical Center. But the Shapiro have subsequently lost half of their assets, some 220 million dollars. Also damaged were Avram and Carol Goldberg, the former owners of Stop and Shop, a supermarket chain, and Stephen Fine, president of Biltrite Corp.. As Reuters reported [79], Swiss banks alone had lost $ 4,220,000,000.

Which specializes in hedge fund Union Bancaire Privée, which had administered in June, 127 billion Swiss francs, gave a total commitment of 700 million U.S. dollars and 800 million in Swiss francs at Madoff. This represented less than 1 percent of total assets under management. This affected mainly the fund DINV total return, its yield is worsened by 3 percent. The bank itself had not invested their own money in Madoff. [80] [81] It denied in January 2009, to have ignored warnings. [82] In May, U.S. investors filed a lawsuit. They demand the restitution of confiscated commissions and interest rates. [83]

The Bank Benedict Hentsch had been merged in August with Fairfield Greenwich Group, which had invested 7.5 billion U.S. dollars in Madoff. The EIM Group, which is 2% of their capital, or 220 million dollars was invested in Madoff was one of the victims. Also everyone Notz Stucki & Cie, and were Benbassat & Cie. Is not affected by his own admission Credit Suisse.

When the damage was not immediately identify, affected and to what extent the banks themselves or their customers were. It was clear that several hundred customers of Hypo Swiss Private Bank Geneva were affected. These are, however, customers who had deliberately and invests on its own with Madoff. [84]. The fraud cost the customer CHF 175 million. Hypo Swiss Private Bank Geneva, and February 2008 Anglo Irish Bank (Suisse) SA was called, was active as a subsidiary of Ireland’s Anglo Irish Bank for years in the hedge fund business. The Zurich headquarters of Hypo Swiss, however, was only marginally affected indirectly through third-party products. [85] Hyposwiss, part of the St. Galler Kantonalbank, provides services to wealthy investors with portfolios 3:00 to 10:00 million. [86]

Syz & Co and Pictet in his own words were not affected, as Lombard Odier Darier Hentsch, Mirabaud and GAM (Julius Baer). Bank Julius Baer told the news agency Reuters that there was no damage.

UBS announced the losses were insignificant. The French asset manager Oddo, however, the shares of its customers who were in Luxembourg Lux Alpha fund, which in turn Depositärin UBS was, and on 4 November had sold, sued UBS. He had never received the money, said a spokeswoman of the French news agency AFP. Therefore Oddo had initiated against UBS in Luxembourg to a process. [87] On 15 January, the UBS Luxembourg condemned to pay compensation of 30 million €.

In principle rotates the legal dispute over the responsibilities of the custodian of funds. “According to Bloomberg, would the big banks, UBS and HSBC to be sued up to 3.2 billion dollars,” reported on 15 January, the Neue Zürcher Zeitung. [88]

UBS had to disclose documents that might prove a violation of their duty of care, a Luxembourg district court ruled, had brought suit against the two individual plaintiffs and the shareholders’ association Deminor. It was about possible contracts between UBS and the investment firm and a Madoff held under lock and auditor’s report. The Luxembourg bank supervision CSSF asked the Swiss to give an account about the business practices. [89] Similarly, it was issued a month later the Herald-Lux Fund. [90]

Austria [change] In Austria, have been harmed, especially retail investors, after an initial estimate of the National Bank for 350 million euros. They had invested in Primeo funds of Pioneer Alternative Investment Management, which belong to the UniCredit Bank Austria group originally, in Milan, and in fund Herald, Herald Herald U.S. and Luxembourg. Primeo investment advisor for the Fund, the Bank Austria Worldwide Fund Management, which was 100% owned by Bank Austria Group. General Manager, and front woman acted Dr. Ursula Fano-Leszczynski.

The Primeo funds for 2008 still had a return of 6.5%. The Herald-funds have been invested by the private Austrian bank Medici, who was based in Vienna. [91] the end of March 2009, the proportion of from Austria to New York amounts transferred already estimated at 3.2 billion €. [92]

Bank Medici [Edit] The Medici Bank was one of a quarter of the Uni Credit, the rest belonged to Sonja Kohn, who had advised the government in economic affairs and the chairman of the bank was. [93]

On 31 December 2008, the Private Bank Medici was forcibly put under state supervision and appointed a government inspector. Managed by the Bank and the Fund created in Madoff LLC funds should include a volume of 3.6 billion dollars. The bank itself, which had 15 employees, estimates the total to 2.1 billion. As late as November 2008, the Viennese banker who finished at “Germany’s Hedge Fund Award” the first place. [94] According to a review of the Sunday newspaper on 11 January 2009 [95] Kohn knew personally since the 80s Bernard Madoff. She had met him in Monsey, a mainly Orthodox Jewish community members inhabited place near New York [96]. In 1990 she founded the company Eurovaleur and after they had returned to Vienna, Medici Financial Services GmbH - all the while the unprotected name “Medici” without passing on any contacts exhibit the Florentine bank. From 1996 to 2000, she advised the Austrian Finance Minister Johann Farnleitner 1999 and received the Grand Decoration of Honour for Services to the Republic of Austria. According to the Sunday newspaper could Kohn predominantly Madoff Investments have driven. Kohn claims to have not known about Madoff pyramid scheme.

Against the Medici Bank led the Austrian National Bank, through an examination. Kohn is with Madoff fraud system 50 million euros per year earned. It should help fund monies in Ireland and Luxembourg have raised and transferred to the Cayman Islands to Madoff. Of these, only 8 million euros a year, will be flown to Vienna, the rest in Switzerland, possibly to the private banking Gene Valor, Benbassat & Cie [97].

On 18 December, the former stock exchange chief Stefan Zapotocky his seat was in the control panel on the Austrian banking industry-Holding AG Fimbag. He had the Board of the Fund managed by Madoff sat Alpha-Prime, [98] was co-developed by Sonia Kohn been [99] Kohn had Cohmad of Madoff Securities Group -. According to the ad that William Galvin, Secretary of State in charge of the U.S. State of Massachusetts published -.. received $ 526,000 [100] Cohmad (composed of Maurice Cohn and Madoff) in turn had received over 67 million dollars from brokers for Madoff services [101] On 22 January countered rumors the bank, the closure is imminent.

Kohn, still on 12 February would remain head of the Medici Bank could not prevent the sale of the bank, the two days was announced later. [102] The attorney Gabriel Lansky showed Kohn and other directors of the Bank for alleged fraud and breach of trust in, the prosecution began its investigations on 25 February 2009, [103].

In March 2009, the company’s website published a statement only that the bank was the victim Madoff, and that it would seek to damage. [104]

On 19 March, the Supervisory Board to close the bank, although a week before the return of the banking license, “an issue” had been. The return of the banking license means, but “not necessarily entail the liquidation of the Company,” which had 20 employees. [105]

Primeo Fund Unicredit Bank Austria [change] As part of the liquidation of the Primeo-Select fund, which was estimated at 650 million euros, was on 24 March in London held the first meeting of investors. Investors who had bought shares in Bank Austria Fund, but are not considered at this time the liquidation because they were not granted status as a shareholder of the Fund. Kroll Limited, the liquidator is in the Cayman Islands.

source: Wikipedia.de

Madoff's first feeder funds

Madoff's first feeder fund was Avellino and Bienes, formed by two employees who had worked with him at the accounting firm of Saul Alpern, Ruth Madoff's father. Avellino and Bienes, which claimed to make its money in same day buy sells, was closed by the SEC in 1992, after many many profitable years of steady returns and no losses,with Avellino and Bienes permitted, by the terms of the court and SEC approved settlement, to keep their profits because Madoff came up with funds over a weekend sufficient to pay all investors in full. Avellino and Bienes were represented in the court case by Ira Sorkin, a former SEC official in its New York office, who subsequently represented Madoff after his ponzi scheme collapsed in December, 2008.

In notifying their customers of their closing, Avellino and Bienes stated that it was due to technical paperwork transgressions and encouraged their former investors to invest with Madoff, without revealing that Madoff had been the broker supposedly executing their purported trades the entire time of their firm's existence. This was the pattern Madoff followed with subsequent feeder funds, always insisting that his involvement not be revealed to investors.

As Madoff had been chairman of NASDAQ the year previous, in 1991, and as the SEC continually assured inquiring Avellino and Bienes investors that Madoff was an honest broker, many Avellino and Bienes investors reinvested their recovered funds with Madoff at that time.66.108.204.23 (talk) 10:18, 23 October 2013 (UTC) Leah Larsen

Are you proposing any change to the article? Rivertorch (talk) 16:58, 23 October 2013 (UTC)

Broken link

1. 116 is broken (under incarceration, about his prison beating).

article is locked so someone else needs to change it I'm afraid — Preceding unsigned comment added by 75.48.10.143 (talk) 18:34, 28 December 2013 (UTC)

1. 21 is broken (under Plea, sentencing, and prison life).

article is locked so kindly change the link to ]

Pranab.bann (talk) 09:52, 26 June 2014 (UTC)

JP Morgan settlement

JP Morgan settled today for $1.7 BILLION - I'm not entirely clear on the details, e.g. there is a delayed prosecution part and an extra $543 million mentioned that I don't quite know whether it's on top or included in the $1.7 billion. The ref is the WSJ, which is a fine source except it will be closed off behind a paywall. Some quotes:

"J.P. Morgan Chase & Co. will pay $1.7 billion to the victims of Bernard L. Madoff's massive fraud as part of a record settlement with U.S. prosecutors that resolves allegations the bank failed to provide adequate warnings about the Ponzi schemer's activities. ... "The deal, described by federal officials as largest ever bank forfeiture, includes a deferred prosecution agreement with Manhattan U.S. Attorney Preet Bharara. Under the pact, criminal charges against the bank for violations of the Bank Secrecy Act will be delayed for two years pending the payments to victims and reforms of J.P. Morgan's anti-money-laundering policies. ... "The $1.7 billion payment is also the largest Justice Department penalty for a violation of the Bank Secrecy Act, according to the government." ... "J.P. Morgan also reached a settlement on Tuesday with a court appointed-bankruptcy trustee collecting funds for Madoff victims, agreeing to pay $543 million, according to a person briefed on the matter. The trustee, attorney Irving Picard, will distribute the funds to victims. Mr. Picard had recovered $9.5 billion, about $4.9 billion of which has been returned to investors to date."

There are also some loose ends on other things. In particular I'd like to find out about:

"According to the same lawsuit, New York Mets owners Fred Wilpon and Saul Katz and associated individuals and firms, received $300 million from the scheme. Wilpon and Katz "categorically reject" the charges."

Smallbones_(smalltalk) 20:09, 7 January 2014 (UTC)

Madoff suffers from untreated kidney disease and had a heart attack in December 2013

Accoring to http://www.huffingtonpost.com/2014/01/22/madoff-suffered-heart-attack_n_4645561.html?ir=Business XOttawahitech (talk) 21:10, 23 January 2014 (UTC)

Copyright problem removed

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Allegations

Some material was removed on the basis that it consisted of abandoned allegations. Query whether it may not be appropriate to retain such information, reported on by RSs, and flag it as allegations subsequently abandoned. --Epeefleche (talk) 04:04, 15 November 2014 (UTC)

Why I took out certain allegations against third parties...

There were a bunch of things in here that referenced allegations made by the trustee, and some legal matters, in a rather misleading way. This is not the fault of the wiki editors, but rather because of a subtlety in the way these things have been described by the trustee and others.

In particular, there's a difference that lawyers draw between allegations of fact and characterizations. The article has been picking up characterizations and treating them as allegations of fact. Examples:

• Whether the Madoff kids "withdrew" money from the scheme. The Madoff kids received money from their employer, which was their father's firm. The monies were nominally compensation in connection with their jobs, which did not involve the fraud. The trustee characterized these as "withdrawals" from the scheme because, on the trustee's theory, the firm was insolvent and only had cash because of the scheme.

• The JP Morgan Settlement J.P. Morgan did not settle claims by the trustee for $1.7 billion, as the article related. J.P. Morgan settled a civil forfeiture action and regulatory proceedings brought by the government. The trustee, whose complaint against J.P. Morgan had already been dismissed, and certain class action plaintiffs, joined the settlement and were allocated a portion of the government's civil forfeiture recoveries.

• The Wilpons and Katzes The article was repeating the claim by the trustee that the Wilpons and Katz's "received money from the scheme," which is sort-of true but when said like that is very misleading. The Wilpon and Katz entities were victims of the schemes (this is universally agreed). Some victims of Ponzi schemes receive more than they paid in. Some accounts belonging to some Wilpon and Katz entities received more from the scheme than they paid in. The trustee's allegation was that the Wilpon and Katz entities should have known that there was a fraud scheme. The allegations were then settled unfavorably to the trustee. http://www.nytimes.com/2012/03/20/sports/baseball/mets-owners-pay-162-million-to-settle-madoff-suit.html?pagewanted=all

• The size of the scheme The difference between the $65B and $12B numbers is the method for calculating damages that was ultimately adopted by the trustee, which was and continues to be a matter being litigated. In brief, typically the amount owed to a customer of a brokerage by the brokerage is the amount shown on the customer's account statements. Certain victims asserted that this was the amount owed to them by the scheme under state law, and the proper measure of their losses. The trustee and SIPC took the position that a victim's loss is measured by mechanically subtracting cash-out from cash-in, regardless of timing.

Every year, Madoff would pay the IRS in respect of bogus "gains" in the accounts, subtracting this sum from the sum he told victims was in their accounts. According to the trustee's method, these payments to the IRS counted as payments of cash to the victims for the purpose of calculating their losses. Thus, a victim could have never personally received any cash from the scheme, but would still have been deemed by the trustee to have no losses, or even to have profited from the scheme.

In addition, the trustee's method excludes persons who invested through "feeder funds," which was the overwhelming majority of investors. Instead, the trustee would treat the entire fund as a single "investor," calculating the total cash paid in and taken out by the fund.

The trustee's method also excludes people who the trustee sued alleging that they should have known about the fraud, such as the Wilpons and Katzes.

Please be aware that these issues are a subject of very active, paid PR activity by the Madoff trustee.

Djcheburashka (talk) 04:13, 15 November 2014 (UTC)

I think this is all very interesting, and don't have any firm views on any of the specifics at this point. Some observations and questions. First, I think it is worth discussion. Second, I think we should follow the RSs in this regard, and not make conclusions based on "I know the RS said x, but I know better." For example, as to the first point (and I do not know if this is the case), if the children in the unrelated entity received high compensation from the fraudulent entity, and it is alleged that this should all be bundled together and looked at as one enterprise, then the allegation if covered by RSs is worth reporting on. Further, if a court holds that, then that is also worth covering -- as a court's holding. If a court rejects it, and RSs cover that, it is also worth covering, as a rejected allegation. The same thinking relates to the other points. Finally, your last note is interesting -- you must I imagine have RS diffs that state that. Tx. Epeefleche (talk) 07:40, 15 November 2014 (UTC)

Epeefleche -- This is necessarily going to be a long answer, because it touches on things that lawyers spend a great deal of time learning and dealing with. It ultimately though, I promise, does get to a simple point. Bear with me...

I absolutely agree with you that we should follow the RS's. I think its important, when reading a source, to interpret it according to the kind of source it is. The sourcing for most of what I took out comes from the trustee's legal filings or reports quoting/paraphrasing those filings. In legal filings, it is a very common writing strategy to blur the distinction between what are (a) actual facts alleged, and (b) inferences, conclusions, and characterizations that the author would like the reader to adopt based on interpretation of the actual facts. The portion in b is not properly regarded as meeting WP:V, even if any of the complaint is. B are the opposite of verified facts, they're conclusions that the litigant seeks to establish during the court process. With respect to the children (I agree this is a good example to stick with), the underlying facts are: (i) there was one entity with multiple divisions, (ii) the kids were employed by the division that is not alleged to have committed fraud and which continues to operate today, (iii) the kids had smallish deposits in the fraud scheme, (iv) payments were made to the kids which were nominally compensation for their work, not attempts to withdraw money from their scheme accounts, (v) Madoff had caused the entity to commit a widespread securities fraud, which had likely rendered it balance-sheet (but not cashflow) insolvent, and (vi) the trustee alleged that the kids "knew or should have known" about the fraud, meaning they were negligent. Does that support the contention that "the kids withdrew money from the scheme"? There is a sense in which that contention is true, but its expressed in a way so readers are likely to take an inference beyond what is supported by any verified underlying fact.

There is also a subtle distinction regarding something called "fraudulent conveyance." In very brief part, certain kinds of "fraudulent conveyance" are transfers from insolvent parties under certain circumstances. Only some fraudulent conveyances are "frauds" in the sense that someone "committed fraud." Receipt of a fraudulent conveyance, even an intentionally fraudulent conveyance, does not depend on or imply any kind of fraud or wrongdoing on the recipient's part. The trustee thus alleged that the kids received fraudulent conveyances. And they well might have. But that does not imply that the kids knew about the scheme or committed fraud. The classic example is a man who gives his grandmother $100 every year for Christmas, and continues to do so after he becomes insolvent. The transfers to grandma are fraudulent conveyances, and grandma can get sued for that, even though neither of them have any bad intent.

Do courts reach holdings on this? Not in ways that would help us resolve WP:RS and WP:V issues. In the Wilpon and Katz case there was a hearing, and the trustee's counsel was pressed extensively by Judge Rakoff on the point, but could not clarify what was alleged. Judge Rakoff then said that to prove his case, the trustee would have to prove that Wilpon and Katz were willfully blind. That is a different legal standard than "should have known." ("Willful blindness" equals actual knowledge; "should have known" is negligence.) But, Judge Rakoff did not scratch out those sentences in the complaint, because that's not how the legal procedure works. Nor did he rule that Wilpon and Katz should not have known about the fraud -- he ruled that it didn't matter.

In terms of wiki-policies, I think way to interpret this, is that we need to keep in mind that the presence of an allegation in a legal complaint (or a description of that allegation in a news article about the complaint) does not mean that the allegation is WP:V. It only means someone made an accusation.

As for "RS diffs" on the last point -- which one are you calling the "last point"? Djcheburashka (talk) 20:19, 15 November 2014 (UTC)