Fund Fraud Hits Big Names Madoff's Clients Included Mets Owner, GMAC Chairman, Country-Club Recruits

[DogPoundPup]

Source: Wall Street Journal

New potential victims emerged of Wall Street veteran Bernard Madoff's alleged giant Ponzi scheme, with international banks, hedge funds and wealthy private investors among those sorting out what could amount to tens of billions of dollars in losses.

New York Mets owner Fred Wilpon, GMAC LLC Chairman J. Ezra Merkin and former Philadelphia Eagles owner Norman Braman were among the dozens of seemingly sophisticated investors who placed money on what could prove to be history's largest financial scam.

Giant French bank BNP Paribas, Tokyo-based Nomura Holdings Inc. and Neue Privat Bank in Zurich are also exposed, according to people familiar with the matter.

And at least three funds of hedge funds -- which raise money from investors and farm it out to hedge funds -- may have significant losses. Fairfield Greenwich Group and Tremont Capital Management of New York placed hundreds of millions of their investors' dollars into funds overseen by Mr. Madoff. On Friday, Maxam Capital Management LLC reported a combined loss of $280 million on funds they had invested with Mr. Madoff.

Read more: http://online.wsj.com/article/SB122914169719104017.html

[Hardrada]

1. Those Nigerian e-mailers have a ways to go!!

[entanglement]

36. I bet you're almost disappointed Madoff isn't of Nordic extraction

:evilgrin:

[Hardrada]

41. Not really. Tusen takk for the thought though.

[Hubert Flottz]

2. Those damned UAW workers and the Clenis are at the bottom of this too no doubt!

Edit...I hate when that happens...

[Puppyjive]

3. I don't pity them

It is hard for me to feel bad for these people who have lost millions of dollars. They all acquired their money by bilking hard working people. I hope the paper trail leads to charitable giving. Wouldn't that be something?

[still_one]

40. There were charities and foundations that invested with him also, and this isn't

going to be the only snake under the rock.

The ramifications doesn't just affect those who acquired their money by bilking hard people, it will also affect those hard working people

[AngryAmish]

4. Please be Rush!

[dixiegrrrrl]

5. Deeeee licious

[Vinca]

6. Oh great. More people to fight with over dollar a can tuna. nt

[radfringe]

7. Madoff Story has BIG LEGS

Expect to see more legs sprouting over the next few weeks.

Story is being followed with great interest here:
http://www.progressivesplayground.com/dc/dcboard.php

[Tandalayo_Scheisskopf]

8. Just one of the first of a number of similar schemes, right?

You know, this crap is getting to easy to figure out, darlin'. ;-)

[radfringe]

11. the bigger the scheme the harder they fall - Madoff and Spain

5. "Forbes: Spain with 3 Billion Euro Exposure in Madoff case?"
In response to Reply # 0
Spain may have 3 bln euros exposure to Madoff-paper, posted at 8.39 a.m. ET.


http://www.progressivesplayground.com/dc/dcboard.php?az=show_topic&forum=127&topic_id=35&mesg_id=35&page=#40

[BumRushDaShow]

13. This WILL be huge.

I was reading all I could last night and had seen the story pop up "innocently" and barely under the radar late Thurs. night and early Fri. morning. Even if the unaffected units of Madoff's firm weren't directly involved, I am guessing that they will most likely have to be dissolved to pay off the investors. This is ugly ugly ugly.

[sarcasmo]

19. The Today show did a piece on this story, that is about MSM as it gets.

[radfringe]

46. U.S. Judge Freezes Madoff Assets, Appoints Receiver, SEC Says

U.S. Judge Freezes Madoff Assets, Appoints Receiver, SEC Says
By Erik Larson
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.9m_dUE2Pxc&refer=home

Dec. 12 (Bloomberg) -- A federal judge in New York froze the assets of New York investment adviser Bernard L. Madoff and his firm a day after the 70-year-old was arrested in a potential $50 billion fraud, regulators said.

U.S. District Judge Louis Stanton in Manhattan today granted a government request to give “emergency relief” to investors by freezing Madoff’s assets and appointing a receiver, the U.S. Securities and Exchange Commission said on its Web site.

Stanton appointed as receiver Lee Richards, a lawyer at the New York-based firm Richards Kibbe & Orbe, according to the SEC, which sued Madoff yesterday for securities fraud. Richards didn’t immediately return a call seeking comment.

Madoff confessed to his two sons, who work for him, that the business bearing his name was a fraud that cost clients $50 billion. The sons told the FBI, according to their lawyer. Federal agents arrested Madoff yesterday morning at his Manhattan apartment. He is free on a $10 million bond.

-------

if Richards Kibbe & Orbe rings a bell: Lehman In-The-Money Swaps Hearing Postponed
December 02, 2008
--Katy Burne
http://www.iiderivatives.com/Home/Article/2061026/Lehman+In-The-Money+Swaps+Hearing+Postponed.aspx

A hearing to determine whether Lehman Brothers Holdings Inc. can secure court approval to start selling in-the-money swaps to expedite payments to creditors has been adjourned until Dec. 16, after originally being scheduled for tomorrow at 10am.

The motion for an order to “establish procedures for the settlement or assumption and assignment of prepetition derivative contracts” will be heard by Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York on the so-called omnibus hearing date, of which Lehman has two a month for motions of its choosing.

[Ghost Dog]

44. I looked around the playground for a while, but didn't find the discussion

you refer to, radfringe. Any chance of a more direct link?

:hi:

(some more breaking news here, btw: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3644250 )

[radfringe]

45. Madoff Charged in Fraud Said to Total More Than $20 Billion

http://www.progressivesplayground.com/dc/dcboard.php?az=show_topics&forum=127

Madoff and Drier aren't going to be the last scammers we see taking a frog march.

these type of "scandals" take a long time to develop, and because of their complexity most people don't follow more than the headlines. We are brainstorming behind the scenes on how best to present the complexity and inter-relations of these scams/scandals.

check out theyrule.net - site database hasn't been updated since 2004, but it does provide give you idea of the incestuous nature of the corporate world
(A Brief Explanation
They Rule allows you to create maps of the interlocking directories of the top companies in the US in 2004.
The data was collected from their websites and SEC filings in early 2004, so it may not be completely accurate - companies merge and disappear and directors shift boards.)

once in the site - click on companies, directors, or institutions from the menu at the top left. enter a name, run a search, then click away. Try Ronald Logue of State Street Corporation

[Ghost Dog]

47. Ah, great, thanks. Some excellent up-to-date data posted there.

:hug:

[radfringe]

48. madoff on wikipedia link

http://en.wikipedia.org/wiki/Bernard_L._Madoff

Im hoping to see some congressional hearings on related matters - like regulations and accountability of thes companies. Madoff isn't the only "bad apple", the whole barrel is rotten.

[radfringe]

51. muckety.com - another good resource

http://news.muckety.com/

[shrike]

9. The Smartest Guys in the Room, my ass

[Acadia Blue]

10. I hope Rush and O'Really have some $$$$$ in this lol

[monmouth]

32. Madoff is a neighbor of Rush's here in Palm Beach, you may

have a good point. They live just north of the Flagler Bridge in S. Palm Beach...Karma Baby!

[alcibiades_mystery]

12. Why, as a Mets fan, am I not surprised the Mets were wrapped up in this

Did everything unravel in September?

:rofl:

[sarcasmo]

18. Maybe they shouldn't be giving out those hefty contracts.

[radfringe]

14. Do any TARP banks have Madoff exposure? If so..."

this will help Waxman expose how GROSSLY lax their due diligence and internal controls processes really are.
http://www.google.com/search?hl=en&safe=off&q=tarp+banks+%22internal+controls%22


http://www.progressivesplayground.com/dc/dcboard.php?az=show_topic&forum=127&topic_id=35&mesg_id=35&page=#43

[NBachers]

15. Quick! Rush $500 Billion to Madoff's Offshore Account!

No questions asked! say Paulson and Bernanke

Republican Senators injured in stampede to vote yes.

[Turbineguy]

16. Rich people lose money because

of SEC incompetence!

Hey, wait a minute... that's wasn't supposed to happen...

[aquart]

23. But they WANTED deregulation and lax enforcement.

It made them HAPPY.

This shouldn't make me laugh. I know they'll make us suffer for it. I know that. But it makes me laugh.

[Cronopio]

27. They wanted anarchy. And I think they're finally getting it. nt

[Turbineguy]

30. They wanted it

the way Ayn Rand laid it out.

The problem was, Ayn Rand's characters had their view but they were honest and moral. They were looking to make their fortune without stealing it from others. Those who stole (by legal means as well) were called "looters".

[Cronopio]

34. Unfortunately, Ayn Rand was a victim of her own romanticized idea of capitalism.

The romance hinged upon the idea that crass, selfish opportunists could be honest and moral at the same time. All she thought they needed was a deal with each other. She didn't think very far into the real reasons why her father lost his business to the Bolsheviks. Ayn Rand was a decent intellect that was derailed by an unresolved Elektra complex.

Crass opportunism and a cohesive society/economy don't mix, no matter how many people you get in on the act. The more people in on the game, the bigger the mess when it blows up.

[Turbineguy]

38. Yeah, you're probably right

when I was reading Atlas Shrugged I kept thinking: "This just ain't gonna work!"

[bread_and_roses]

29. Me too. It's all falling apart, isn't it? All their lies, their greed, their exploitation

of anyone who does actual WORK instead of pushing paper.

[sarcasmo]

17. I have no sympathy for a mega rich person or Corporation that gets swindle.

They had a segment on this story during the Today show.

[FarCenter]

20. creating "invitation only" policies for investors

Details emerged Friday of how Mr. Madoff ran the alleged scam, fostering a veneer of exclusivity and creating an A-list of investors that became his most powerful marketing tool. From New York and Florida to Minnesota and Texas, the money manager became an insider's choice among well-heeled investors seeking steady returns. By hiring unofficial agents, tapping into elite country clubs and creating "invitation only" policies for investors, he recruited a steady stream of new clients.

During golf-course and cocktail-party banter, Mr. Madoff's name frequently surfaced as a money manager who could consistently deliver high returns. Older, Jewish investors called Mr. Madoff " 'the Jewish bond,' " says Ken Phillips, head of a Boulder, Colo., investment firm. "It paid 8% to 12%, every year, no matter what."

[aquart]

24. Madoff. Abramoff.

Jews cheating Jews. This is where I stop laughing and feel such shame.

[Cronopio]

26. The Saduccees hatched the plot to kill Jesus.

The Kapos paid for their uniforms and looked the other way when told to. They all had their rationalizations for cheating their own.

No group's track record is spotless. Only a few *individuals* can hit the mark.

[CheCheCheCheYerBooty]

57. Let's hope

some of the money was spent to support repuke candidates! I would love to see them groveling to send the money back.

[FarCenter]

21. Boston donors bilked out of millions

Some of Boston's wealthiest and most prominent philanthropists have lost millions of dollars to a Wall Street investor accused of running a $50 billion Ponzi scheme, a case that has already shuttered one foundation and could hurt nonprofits in medicine, education, and the arts.

...

His clients include philanthropists Carl and Ruth Shapiro, major donors to the Museum of Fine Arts, Brandeis University, and Beth Israel Deaconess Medical Center. The Shapiro family foundation lost almost half its money, or about $145 million, to Madoff. Other clients include Avram and Carol Goldberg, former owners of the Stop & Shop supermarket chain, and Stephen A. Fine, president of Biltrite Corp. in Waltham.

In Salem, the Robert I. Lappin Charitable Foundation, a private family organization that financed trips for Jewish youth to Israel, said it was forced to shut down and lay off seven employees yesterday after losing all of its estimated $8 million to Madoff. The foundation also supports Jewish educational and cultural services on the North Shore. Lappin lost personal funds as well.

...

Madoff, 70, appears to have made inroads in philanthropic circles in Boston and Palm Beach, Fla., as well as in New York. As with the Shapiros, some of the Boston clients maintained homes in Palm Beach and socialized with Madoff there, especially at the country club. Madoff had many clients in the Jewish community in particular, where word of the alleged fraud spread rapidly yesterday.

...

http://www.boston.com/business/articles/2008/12/13/boston_donors_bilked_out_of_millions/

[Spouting Horn]

28. Well, in that case

the Taxpayer should just fork over the "lost" $50 billion and make all the victims whole again.

[Robbien]

31. "In the old days the returns were 27 percent"

http://www.newsday.com/services/newspaper/printedition/saturday/business/ny-bzfed135963286dec13,0,1472556.story


Investors were just blinded by their greed. Returns of this kind of course involve risk, and more than likely fraud.

[hedgehog]

33. Unless you have a real break through technology (say, moving to

computers from manual typewriters), you will never get a real return of 27%. I think that we're seeing the result of money going into what I call imaginary investments, money making money, rather than real investments; say installing that new machine which will give us 5% lower costs to make our product or that furnace which burns 20% less fuel.

Just a wild speculation, but we may yet find that GM was investing in financial instruments rather than in researching the next generation of transportation because the return was better.

[FarCenter]

39. GMAC is not speculation, it was GMs finance arm

GM got into finance in a big way. Auto loans and leases, loans to their dealers, and then into residential mortgages by acquiring Res Cap and Ditech.

[hedgehog]

53. I'm not saying that GMAC was speculative or even risky. WIthout having

any facts to back myself up, I'm suggesting that the maximum profit on actually building a car might have been say, 5% while the profit for financing the purchase of that car might have been 10%!

If you were a manager, responsible to stockholders, where would you put the most money?

[Robbien]

52. With GMAC having such a hard time right now trying to sell its latest Ponzi scheme

I expect your speculation about GM spending most of its time playing with money instead of cars to be right on the mark.

[aquart]

22. No one is as easy to scam as someone who thinks he's smart.

So does this mean these fancy hedge funds built their reputations on investments that didn't exist?

[Gin]

25. they all probably have insurance with AIG to cover their losses

[fedsron2us]

35. You know times are hard when the rich are reduced to robbing each other.

For years and years I've heard people say that investment performance was too good to be true. The returns were too steady -- like GE earnings under Welch -- and too high given the supposed strategy.

One Madoff investor, himself a legend, told me that Madoff's performance "just doesn't make sense. The numbers can't be straight." Another sophisticated Madoff investor actually went through trade confirms in order to reverse-engineer the strategy and said, "it doesn't add up."

So why did these smart and skeptical investors keep investing? They, like many Madoff investors, assumed Madoff was somehow illegally trading on information from his market-making business for their benefit. They didn't consider the possibility that he was clean on that score but running a good old-fashioned Ponzi scheme.

http://finance.yahoo.com/tech-ticker/article/145115/I-Knew-Bernie-Madoff-Was-Cheating--That%27s-Why-I-Invested-with-Him?tickers=^dji,&gspc,^ixic

[entanglement]

37. Since Madoff mostly stole from fellow parasites and not working people, he'll be adequately punished

Capitalist / ruling-class thieves are not supposed to steal from each other!

[Hardrada]

42. They are forced to do this since no one else has any money

anymore.

[WriteDown]

55. This may be one of the most ignorant posts I've read....

Fellow parasites? Just because they're wealthy? What about all the pension funds and charities? This is not something to take joy in. I do have one BIG question. The recipients of these phantom returns were no doubt taxed on their gains. What happens to all that tax money? Is it refunded now?

[barbtries]

43. i think the american people

got hit up for more than that.

[FreeStateDemocrat]

49. Too damn bad for the Greedy class. If some of Paulson's buds can benefit he'll toss'em 25 billion.

[nichomachus]

50. Bottom line: If it sounds too good to be true, it probably is

When someone is giving you 8-12 percent returns "no matter what," there should be alarm bells going off in your head so loud that I should be able to hear them.

The easiest people to scam are greedy people.

[muriel_volestrangler]

54. Banks hit worldwide by US fraud

* The Royal Bank of Scotland said on Monday it could potentially lose about £400m from the alleged fraud, if all its investments had to be written off
* Spain's largest bank, Santander, which also owns the UK High Street banks Abbey, Alliance & Leicester and Bradford & Bingley, said one of its funds had $3.1bn invested in the firm run by Bernard Madoff
* France's BNP Paribas estimated its exposure to be more than $460m
* The French bank, Natixis, a subsidiary of Caisse d'Epargne and Banque Populaire, said it could potentially lose up to 450m euros (£402m; $605m)
* One of the world's biggest investment groups, Man, said it had invested about $360m through its RMF institutional fund of funds business, representing 0.5% of its total funds
* Japanese bank Nomura said its exposure was relatively small, at about 27.5bn yen (£201m), and added: "We regard this as non-material, considering our capital base."

http://news.bbc.co.uk/1/hi/business/7783236.stm

[Julius Civitatus]

56. Madoff was using the good ol' PONZI SCHEME

the typical pyramid scam. Again, how did this con-artist become the head of Nasdaq?

[Fire1]

58. I have nothing against the rich......just the 'greedy.'

[Fire1]

59. I think Steven Spielberg was in that group.