Posted on 01/15/2009 6:30:54 AM PST by marshmallow
A federal agency that regulates brokerage firms says there is no record of Madoff's investment funds placing trades through his brokerage operation. That leaves only two options - either he was placing trades only through other firms, which would be highly unusual, or he was not placing any trades.
"There was no evidence of the Madoff broker-dealer executing trades for the [Madoff] investment adviser," said Herb Perone, spokesman for the regulatory group, the Financial Industry Regulatory Authority. A broker-dealer is any firm that buys and sells securities.
FINRA and its predecessor, the National Association of Securities Dealers, has been examining the records of Madoff's broker-dealer operation, Bernard L. Madoff Investment Securities, every two years since the firm started in 1960. The last exam was in 2007, Perone said.
The finding is one of many facts investigators are poring over as they seek to piece together Madoff's alleged $50 billion Ponzi scheme, according to a lawyer involved in the case. Evidence that Madoff - who made his name as a trader of Nasdaq stocks - did not process any of his investment funds' trades through his own brokerage is a key indicator that he was not making the trades he claimed.
Ordinarily, a firm that owns both an investment advisory business and a broker-dealer, like Merrill Lynch & Co., would place a large portion of trades through its own broker-dealer. That's because a firm wants to earn fees on its own trades if possible. Investment firms must seek "best execution," or the best deal they can get on trades for their customers, so some trades typically will be handled by other firms. But to farm out every trade is almost unheard of.
A Madoff lawyer, Daniel J. Horwitz, declined to comment on Madoff's trading.
(Excerpt) Read more at boston.com ...
The sons ran the broker dealer. If he wasn't trading through them at all, they had to know. If the level of trades wasn't commensurate with his assets, they must have suspected. It's impossible to believe they never solicited their fathers business, or that he directed all of it elsewhere.
S&H Green Stamps were an early, cash-based rewards program. Since outclassed by the likes of the Citi Platinum Rewards Card.
When everything is over and done I think we will see a remarkably sparse papertrail, and certainly no audit trail at all.
Yes, but "on paper" had a different meaning here than it normally does. At least with Fidelity Investments, say, the portfolio is really worth what the paper statement says at that point in time (I hope).
As has been stated a thousand times on this forum alone, in a Ponzi scheme the deposits of the more recent investors are used to service the redemption requests of the earlier investors, as long as the requests don't get too large. In this scheme, the system began to break down probably about the time the equity bear market started in the fourth quarter of 2007, as investor's needs for cash increased. Redemption demands increased throughout 2008 until Bernie finally let the cat out of the bag. It is possible Bernie was siphoning off a percentage all along into a nameless account somewhere. Some of the proceeds paid to early investors will have to be returned (to later investors).
Right..... On paper means two different things here.
But for sure, all the Madoff investors had were “paper profits”
we shouldn't!!!......we (the government) should not be bailing out ANYONE!!! there isn't enough money to bail everybody out, so the corrupt bail out their friends at our expense.....it will be this way until we take back our country!!!! at some point we (the people as a whole) have to take responsibility for what we have allowed to happen to our country/government.
Quite true...he must have very slick or the SEC was simply in his pocket.
I didn't know that, interesting. Yes, do a little ball-busting on them while we're at it. Then stick their sorry butts in project housing.
The up front warning of most any hedge fund: you have to be worth $10 million, minimun buy in $1 million, no guarantees, you have to be able to afford losing everything.
yitbos
Looks that way! LOL
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