The trustee seeking money for victims of imprisoned swindler Bernard Madoff has reached an agreement with the U.S. Internal Revenue Service (IRS) to recover $326 million that was earlier transferred to the agency by Madoff’s firm purportedly on behalf of foreign account holders, court documents showed. Read more on Reuters [...]
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Former Governor Jon S. Corzine (D-NJ) might have outsmarted himself as head of MF Global. A bankruptcy trustee today said that as much as $1.2 billion in customers’ funds is missing. Jon Corzine took over as head of MF Global shortly after he stepped down as Governor of New Jersey. During that time, he bet heavily on European sovereign debt. As those debts started to go bad, he co-mingled customers’ settlement cash with the firm’s own cash. Read more in the Examiner [...] The court-appointed trustee overseeing MF Global’s bankruptcy says up to $1.2 billion is missing from customer accounts, double what the firm had reported to regulators last month. Read Bloomberg Businessweek report here. [...] David L. Kugel, 66, admitted to helping Madoff create fake, backdated trading records beginning in the early 1970s, the Justice Department said. Kugel pleaded guilty Monday to six criminal counts, including conspiracy, securities fraud and bank fraud. He faces sentencing in May. Read Washington Post report [...] David Kugel pleaded guilty in U.S. District Court in Manhattan to conspiracy, securities fraud, bank fraud, falsifying business records and falsifying the books of an investment adviser, charges that carry a potential penalty of up to 85 years in prison. A cooperation deal with prosecutors that leaves Kugel free on $3 million bail would earn him leniency at a sentencing tentatively scheduled for May 4. As part of the plea, he agreed to forfeit $3.5 million to the government. Read Bloomberg Businessweek report [...] Alert: The Trustee’s Sixth Interim Report can be viewed [...] Q: You go to great lengths to proclaim both Madoff sons’ ignorance of their father’s crimes. But I wondered if you agreed with the Madoff victim who said that even if the brothers didn’t know, “they led lives that weren’t theirs to lead.” The Securities and Exchange Commission has started targeting investment advisers who have lied on their registration forms. The crackdown is part of an effort to address malfeasance before it grows into a larger investor protection threat. The SEC has begun reviewing registration documents to find financial advisers who have not accurately portrayed their education, assets under management and other aspects of their firm, Robert Khuzami, director of the commission’s Division of Enforcement, said last week. Read Investment News report here. [...] Gary D. Cohn, the president of Goldman Sachs, is expected to be interviewed by the government in its insider trading case against Rajat K. Gupta, a former director of the bank. Mr. Cohn’s name emerged on Friday during a hearing in Federal District Court in Manhattan before Judge Jed S. Rakoff. Read more in the New York Times [...] MF Global issued $325 million of 6.250 percent, 5-year senior notes in August 2011. The deal was led by Jefferies, a global investment banking group, and co-managed by investment banks BofA Merrill Lynch, BMO Capital Markets, Commerzbank, Natixis, Lebenthal & Co. LLC, Sandler O’Neill and Partners L.P., and U.S. Bancorp. I provide this backdrop because you have to see that once again those who have a fiduciary responsibility to protect investors failed. The banks on this deal are underwriters of securities who are obligated to perform due diligence on the issuer (MF Global) to protect investors. I have no doubt that the bankers performed their due diligence…But did the bankers adequately assess the character of MF Global’s management? Read Washington Times report [...] |
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