Replies

L/E should looks at Daley’s activities at JPMChase. The trustee ID'ing his assets found Madoff used the time-tested Wall Street MO----creating a super-secret labyrinth of interrelated international funds, institutions and financial entities of almost unparalleled complexity and breadth......with assets and businesses in multiple places overseas that hid thievery, money laundering and tax evasion.

To the astute observer, Madoff was running simultaneous scams:

(1) a tax evasion scheme for wealthy businessmen ("losing" money is a tax write-off;

(2) a money laundering scam;

(3) a protection racket for affinity groups,

(4) aiding and abetting wealthy tax-exempt foundations to evade US banking laws and the IRS.

(5) hiding money for wealthy businessmen some of which was used for campaign donations (FEC fraud), and foundation fraud (IRS fraud)

Keep in mind Bernie‘s investors were savvy, astute successful business people, accustomed to constructing, picking apart and analyzing financial statements. One investor who spoke to reporters was a stockbroker (her family invested with Bernie for generations---the family's patriarch founded the wildly successful Stop and Shop supermarket chain). Other investors gave Madoff $100-500 millions to "invest" for years and years.

MADOFF'S INVESTORS ABIDED BY THE CONDONATION LEGAL PRINCIPLE The compelling legal principle of “condonation” is operating here---implied forgiveness for certain behavior. Meaning investors implicitly “condoned” Madoff’s actions over a period of time--sometimes decades.

His investors willingly acquiesced to Madoff's activities in several ways:

(1) Sending Madoff enormous sums of money, sums that were spread out over time (some families invested for generations), even AFTER they had the opportunity to assess their investments;

(2) Referring other investors to Madoff (if the investment was so bad, why did they bring in other investors?);

(3) Taking profits out of the investment, rolling it over, or putting more money in;

(4) Writing PERSONAL checks to Madoff's subrosa spinoff vehicle that was not listed on the Securities Exchange (tax evasion modus);

(5) Accepting, without question, Madoff’s obviously flawed monthly statements.

YEAH SURE---I BELIEVE THIS (/SNIX) The SEC did not have “the slightest clue” about Madoff's financial fraud. Until Madoff confessed.

A high-level JPMorgan risk officer was warned that Bernie Madoff had “a well-known cloud” over his head and was suspected of running a Ponzi scheme nearly 18 months before he was charged.

And...? There have been several financial / investment firms who wouldn't fall for Madoff's pitch and wouldn't do business with Bernie when he refused to show how he can achieve his "stable returns". JPMorgan was one of them, and they shut down their own small account with him, and only provided "pass-through" service for people who wanted to invest with Madoff.

Why not sue SEC and FInRA and Spitzer's office? They were specifically warned about Madoff, and SEC made several "audits" of Madoff, yet didn't discover the Ponzi scheme. Was any of the prospective

Picard has no claim for "clawback" here, let alone any money in illusory "damages". But the lawsuit will generate "shocking" headlines and he hopes that the "bad publicity" may spur JPMorgan to settle for some amount...

I doubt this one will go anywhere, but hey, lawsuits are what Picard is there to do.