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A full report on Bernard L. Madoff Investment Securities Ponzi scheme: GREED and STUPIDITY!

By Amarendra Bhushan for CEOWORLD Magazine Updated:December 16, 2008

I agree and I call it GREED and STUPIDITY… who in the hell in their right mind thinks that a money manager can return 8% to 12% per year…even when the market goes to hell in a handbasket…even in the era of 1974…come on!!!

I recall quotation by French realist novelist Honore de Balzac, Behind every great fortune there is a crime. Seems to be working now.

Wall St. is a big casino, the trick to it is to get in early and get out at the right time, its all in the timing…. This guy was just smarter than all those others out there and they trusted him and gave him the benefit of the doubt..

Who were his victims? How did one man create so much damages is incredible. Even the so deemed smartest of the smartest got trapped.

Bernard L. Madoff Investment Securities LLC.f Family Business:

A partial family tree shows how the family occupied the firm’s executive offices.

Bernard L. Madoff- Born 1938, Firm lunch 1960 owned 75% of the company

Peter (Brother)- Senior managing director and chief compliance officer; owned less then a 5% stake

Bernard L. Madoff >> Andy (Director of Trading) & Mark (Director of Proprietary trading)

Peter>> Shana (Firm’s compliance attorney)

- 1960, Mr. Madoff founded the securities firm

- 1970, his brother Peter joined the firm after finishing law school (later becoming senior managing director, now director of trading and chief compliance officer)

- 1988, Andrew, 42, a director of proprietary trading; graduating from the University of Pennsylvania’s Wharton School

- 1986, Mark, 44, also a director of proprietary trading; University of Michigan

- Andrew Madoff also is chief executive of Madoff Energy

- Peter’s daughter Shana is a compliance lawyer for Madoff Securities.

Bernard L. Madoff Political Donations:

– Sen. Chuck Schumer
– Democratic Senatorial Campaign Committee
– President-elect Barack Obama -at least $2,800 source: nydailynews
– Sen. Hillary Clinton $4,600 source: nydailynews
– Charles Rangel
– Vito Fossella
– Frank Lautenberg (New Jersey) source: wsj
– Massachusetts Rep. Ed Markey
– New York Sen. Hillary Clinton
– Massachusetts Sen. John Kerry
– New York Rep. Carol Maloney
– Massachusetts Sen. Ted Kennedy
– New York Rep. Charles Rangel
– New Jersey Gov. Jon Corzine
– New Jersey Sen. Frank Lautenberg
– Former Missouri Sen. Dick Gephardt
– Former New Jersey Sen. Bill Bradley
– Former Texas Rep. Jack Fields
– Arizona Sen. John McCain
– Former N.Y. Rep. Vito Fossella
– Former Louisiana Rep. “Billy” Tauzin
– Former N.Y. Rep. Daniel Frisa
– Former N.Y. Sen. Alfonse D’Amato
– Merkley, Jeff
– Saul, Andrew Marshall
– Securities Industry & Financial Mkt Assn

How is the average guy suppose to know if these guys are crooks?
Even the pros didn’t see this one… or The pros are all crooks, one way or another aswell…

Firms were clients of Madoff:

- Austin Capital Management managed money for the Massachusetts state pension fund. Lost $12 million.

- Chais Family Foundation, which donates about $12.5 million annually to Jewish causes, will be forced to close.

- NOMURA HOLDINGS admitted it had a 27.5 billion yen ($303 million) exposure related to Madoff.

- HSBC HOLDINGS PLC has potential exposure of about $1.5 billion

- REICHMUTH & CO – Swiss private bank said its fund of funds Reichmuth Matterhorn had an exposure to investments about $325 million.

- GRUPO SANTANDER SA – Spain’s largest bank said its investment fund, Optimal, has a 2.33 billion euro ($3.05 billion) exposure to Madoff Securities.

- BNP PARIBAS – France’s largest listed bank has a potential 350 million euro ($464.3 million) exposure.

- ASCOT PARTNERS LLC – According to a Wall Street Journal report, the fund where former GMAC chairman Jacob Ezra Merkin is a money manager has an exposure of $1.8 billion.

- NATIXIS could have a 450 million euro ($602 million) indirect exposure to Madoff

- ACCESS INTERNATIONAL ADVISORS has an exposure of $1.4 billion.

- ROYAL BANK OF SCOTLAND GROUP PLC – Had exposure through trading and collateralized lending to funds of hedge funds invested with Madoff, with a potential loss of around 400 million pounds ($597.9 million)

- UNION BANCAIRE PRIVEE – Swiss bank that invests in funds of hedge funds has lost about 1 billion francs ($850 million)

- BENBASSAT & CIE – Swiss private bank has an exposure of $1.1 billion francs ($935 million), according to Le Temps.

- MAXAM CAPITAL MANAGEMENT LLC – The fund has lost about $280 million on funds invested with Madoff, according to a Wall Street Journal report.

- PIONEER INVESTMENTS – UniCredit SpA’s fund management unit is exposed to $280 million through its Primeo Select hedge fund, according to Bloomberg.

- EIM GROUP – Le Temps reported that EIM Group, a fund of hedge funds, said it had a $230 million exposure.

- FAIRFIELD SENTRY LTD – The $7.3 billion hedge fund run by Walter Noel’s Fairfield Greenwich Group had accounts with Madoff Investment Securities.

- KINGATE GLOBAL FUND LTD – The $2.8 billion hedge fund run by Kingate Management Ltd had invested in Madoff Investment Securities.

- UBS – The investment bank unit of the Swiss financial group has a limited and insignificant counterparty exposure, its spokesman told Reuters.

- BENEDICT HENTSCH – Swiss private bank said its exposure to products linked to Madoff amounted to 56 million francs ($47 million), or less than 5 percent of assets under management.

- BBVA – Spain’s second-largest bank said no customers in Spain were exposed to the alleged fraud.

- List goes on and on………………….

The Jewish Community Foundation of Los Angeles (The Foundation) today issued the following letter to the public regarding the impact of the collapse of the Bernard Madoff investment funds. The Foundation, the largest manager of charitable gift assets for Los Angeles Jewish philanthropists, stated:

Dear Friends,

The Jewish Community Foundation of Los Angeles was shocked and outraged to learn that it is among the many victims of the massive alleged fraud attributed to veteran Wall Street investment advisor Bernard Madoff.

The Foundation invested a total of $18 million with the Madoff firm, representing less than 5% (five percent) of the Foundation’s assets.

Donor Advised Funds were not affected by the alleged Madoff fraud. Donor Advised Funds are held separately in Treasury notes and other government instruments.

The $18 million was part of The Foundation’s Common Investment Pool, set aside for long-term endowment-type uses.

The loss, while unprecedented in The Foundation’s 54-year history, does not threaten The Foundation’s stability, its existing commitments, or its ability to maintain its leading role in the Los Angeles philanthropic community.

Despite this loss, The Foundation has a long-term record of generating favorable returns from its investments. The Foundation’s emphasis on diversification, both of investments and of investment advisors, helped limit the impact of the Madoff collapse.

In light of the substantial recent declines in the stock market as well as the financial impact of the Madoff situation, The Foundation is re-evaluating its investment strategies and examining ways to respond to these changed market conditions. This process includes a full review of The Foundation’s policies, practices and due-diligence procedures.

The Foundation is aggressively pursuing every possible recovery and remedy related to the Madoff situation.

We are committed to a fully transparent sharing of information with our donors, supporters, grant recipients and the community, and will continue to report to The Foundation’s constituencies as we learn more. This will include updates to a dedicated page on The Foundation’s website at www.JewishFoundationLA.org.

Sincerely,

Cathy Siegel Weiss Chair
Marvin I. Schotland President and CEO

Established in 1954, the Jewish Community Foundation is the largest manager of charitable assets and the leader in planned giving solutions for Greater Los Angeles Jewish philanthropists. As of December 31, 2007, The Foundation managed assets of nearly $800 million and ranks among the ten largest Los Angeles foundations (based on assets). In 2007, The Foundation and its 1,200-plus donors distributed $78 million in grants to more than 1,850 organizations with programs that span the range of philanthropic giving. For more information, please visit www.jewishfoundationla.org

Greed has no religious or cultural affiliation!

This guy just proved that Wall Street is a scam. His securities firm was the one that the ones that exist now emulated to become big. What does that say about our economic system? He was former chairman of NASDAQ for Christ sakes!

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