January 9th, 2009 | Black Star News BY Edward Manfredonia
FR Posted January 09, 2009 By Lorianne
As I have stated in previous columns, Arthur Levitt, as Chairman of the Securities and Exchange Commission, protected Bernard Madoff from investigations by the SEC because of Levitt’s friendship with Madoff. But Levitt has more ties to Madoff that have not been discussed in the press-and these ties date to Levitt’s tenure as Chairman of the American Stock Exchange (AMEX) from 1978 to 1989.
Cohn Delaire and Kaufman was a large American Stock Exchange specialist firm during the 1960s and early 1970s. It had several very busy stocks including Milo Electronics. Any stock with the suffix –onics, which denoted electronics, was very busy during the 1960s. Cohn Delaire and Kaufman was not self-clearing, unlike Madoff’s firm, an important point.
The three principles of Cohn Delaire and Kaufman were Maurice “Sonny” Cohn, Alvin “Sonny” Delaire Jr., after his father passed in 1968, and Joseph Kaufman. When Levitt assumed the Chair of the AMEX in 1978 only Delaire and Kaufman were members of the American Stock Exchange. Delaire became an options market maker. Cohn had left to form his own company. Joseph Kaufman, a one time governor of the AMEX, was the principal in a small equity specialist unit-all that remained of the mighty Cohn Delaire and Kaufman. During Levitt’s tenure at the American Stock Exchange Joe Kaufman was a Senior Exchange Official and was prominently involved on several committees.
But it is Maurice “Sonny” Cohn, who became important-as a partner of Bernard Madoff. Cohn and Madoff formed Cohmad Securities, in an effort to attract wealthy investors.
In the mid 1980s Delaire left the American Stock Exchange to be a fund manager. Delaire ended up at Cohmad Securities. It was Gene Weissman, a name partner in Lieber and Weissman a day trading firm, who first informed me of Madoff and his illegal trading.
The first instance was in 1998 when his day traders attempted to purchase stock from Madoff but when their orders arrived Madoff changed the quote and informed them that the stock was unavailable. But it was the second instance, which was more telling. Weissman had established branch offices of Lieber and Weissman in Chicago and Philadelphia. It was in the Chicago office of Lieber and Weissman that one of their day traders formed an illegal pool of investors for which he would trade. This day trader had organized an investment group with the knowledge of Weissman.
This day trader did not file a registration statement with the Securities and Exchange Commission as required because he was managing the money of several investors. This day trader’s losses exceeded $1 million. In 1999 I was informed of this violation of federal securities laws by an investor in Lieber and Weissman. I promptly reported this violation of federal securities laws to the Philadelphia Stock Exchange because Lieber and Weissman was a member firm of the Philadelphia Stock Exchange.
It was the duty of the Philadelphia Stock Exchange to investigate and discipline Lieber and Weissman. The Philadelphia Stock Exchange informed Weissman that I had reported Lieber and Weissman for permitting a pool of investors to trade illegally. I was never contacted by the Philadelphia Stock Exchange. To my knowledge the Philadelphia Stock Exchange never investigated Lieber and Weissman.
Weissman, who had served as a source of information for me, was upset. I stated that even though he had provided me with information about his competitors, I was compelled to report him for violating federal securities laws.
It was then that Weissman told me that I should report Madoff to the SEC for trading the money of investors. I told Weissman to file his own complaint against Madoff, and I would pass along the information to a reporter at BusinessWeek. Weissman refused. Weissman stated that Levitt would merely order the SEC to inform Madoff of Weissman’s complaint.
Weissman stated that Levitt always protected his friends--just as Levitt had done in the PNF fiasco, which was a mafia run entity, and the subject of a front page Wall Street Journal article in July 1992. In 1993 sources told me that Levitt had the SEC cover up the involvement of members of the Board of the American Stock Exchange, Louis Miceli and Robert VanCaneghan, in the Mafia backed stock fraud, which was introduced at the American Stock Exchange.
Government sources told me that Levitt also had the SEC cover up the involvement of Steven Lister, Senior Vice President of Compliance at the American Stock Exchange, in the Mafia-backed stock fraud, PNF. (Levitt had been nominated by Bill Clinton as Chairman of the Securities and Exchange Commission largely because Arthur Levitt had raised in excess of $4 million for Bill Clinton’s presidential campaign.)
When I pressed Weissman for more information on Madoff’s illegal trading, Weissman refused because he was afraid that his firm would suffer reprisals if it were known that he had provided me with information concerning violations of federal securities laws.
It is readily apparent that Levitt’s ties to the American Stock Exchange as well as his friendship with Bernie Madoff influenced Levitt to cover up Madoff’s violations of federal securities laws. Levitt’s refusal to utilize the powers of the Securities and Exchange Commission to investigate and sanction his friends and other powerful Wall Street figures, has led this country into a financial crisis. This dereliction of duty will cost America a trillion dollars.
MAP OF MADOFF'S FAMILY-SOCIAL LABYRINTH USED
TO RAKE IN BILLIONS---INTERACTIVE AT WEB SITE
WEB SITE http://news.muckety.com/2008/12/28/madoff-used-social-family-networks-to-rake-in-billions/9031
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