Oh, please---that's a key element of the fraud---not being a registered financial entity. Remember Madoff also ran a so-called legit investment business above the 17th floor where the Ponzi was operating.
Even some of Madoff's billion dollar feeder funds were not registered.
ITEM Stanley Chais, a private investor from Beverly Hills whose investors were mostly from well-to-do Jewish families on the West Coast. Chais, 82, lived in Beverly Hills for many years before absconding to Jerusalem. Touting himself as a financial whiz kid, Chais boasted about his investment pool called The Arbitrage (later found to be unlicensed), which received returns of about 10 to 15 percent every year.
ITEM Chais charged substantial fees - 4.5% of clients’ assets, according to paperwork given to news organs. Four of his investors told the Journal that they had never heard of Madoff until his arrest when they received a letter from Chais’ accountant, saying that all their money had been invested with Madoff (many other feeder funds never advised clients they were invested w/ Madoff).
Later his spox said, “Mr. Chais was shocked to learn of what appears to be a Ponzi scheme of unprecedented proportions operated by Bernard Madoff, an individual whom he had known for decades,” Eugene Licker, a lawyer for Mr. Chais, said in a statement to the Journal. “If the allegations are true, Mr. Chais and his family, like others, have watched personal wealth evaporate overnight.”
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Madoff facilitator, Stanley Chais, Beverly Hills, operated the Chais Family Foundation and Brighton Co Investments. Chais is a "philanthropist" who served on "charitable" boards with Madoff. Chais (pronounced Chase) told the Jewish Journal of Los Angeles that he personally invested with Madoff but also "facilitated" others who wished to do likewise. However, spokesmen for the SEC and the California Dept of Corporations said they could find no record of Chais registering as an investment advisor or a broker.
Stanley Chais offers remarks at the Weizmann Institute of Science.