SEC Official Points To The Downside Of Madoff Reaction

Criticism leveled at the Securities and Exchange Commission for its failure to detect Bernard Madoff’s ponzi scheme has had a chilling effect on the regulator, according to George Canellos, the New York regional director of the SEC. There’s now a reluctance within the SEC to drop investigations, Canellos said, speaking at the Dow Jones Compliance Symposium being held in Washington. “If you get bogged down in investigating everything to the ends of the earth, it prevents you from investigating other things…we’re operating in a triage environment,” he said. More in the Wall Street Journal [...]

J.P. Morgan Tops the Witness List

A House subcommittee said a top lawyer at J.P. Morgan Chase & Co. will testify at a highly anticipated hearing Wednesday into the collapse of MF Global Holdings Ltd. Diane Genova, a deputy general counsel at J.P. Morgan, was one of seven witnesses announced by the House Financial Services subcommittee on oversight and investigations. The New York bank declined to comment Monday on Ms. Genova’s likely testimony. J.P. Morgan hasn’t previously been questioned by lawmakers about its ties to MF Global. See Wall Street Journal report [...]

MF Global clients see recovery prospects improving

Former clients of MF Global are growing more optimistic about the prospects for recovering their frozen money, which is helping to bid up the price of customer claims being resold to distressed debt traders and investors. Most customers have received about 72 cents for every dollar they had invested with the futures broker, which filed for bankruptcy in October, and have filed claims in court for the rest. Read Reuters report [...]

Madoff Feeder Fund’s Liquidators Drop Ernst & Young Lawsuit

The liquidators of M-Invest Ltd., a so-called feeder fund for Bernard Madoff’s bankrupt investment firm, dropped a lawsuit accusing Ernst & Young LLP of negligence, malpractice and breach of contract. The liquidators said in documents filed in New York State Supreme Court in December that they were suing the New York- based accounting firm over audits of M-Invest’s annual financial statements from 2003 to 2007 and seeking $900 million in damages. Ernst & Young said the suit was without merit. More on Bloomberg [...]

Madoff Trustee’s Settlement With Picower Is Upheld by Court

A federal judge upheld a $5 billion settlement between the trustee liquidating Bernard Madoff’s former firm and the estate of Jeffry Picower, one of the con man’s biggest individual investors. U.S. District Judge John Koeltl, considering an appeal from bankruptcy court decisions, affirmed the settlement and ruled that the bankruptcy judge was right to bar suits against the Picower estate. Read more in Bloomberg Businessweek [...]

Righting Others’ Wrongs:

A Critical Analysis of Clawback Suits in the Wake of Madoff-Type Ponzi Schemes and Other Financial Frauds. Click here for study by Amy J. Sepinwall, assistant professor at The Wharton School of the University of Pennsylvania in the Department of Legal Studies and Business [...]

E-Mail to Corzine Said Transfer Was Not Customer Money

Jon S. Corzine, the former chief executive of MF Global, was told during the brokerage firm’s final day of business that a crucial transfer of $175 million came from the firm’s own money, not from a customer account, according to an internal e-mail. The e-mail, sent by an executive in MF Global’s Chicago office, showed that the company had transferred $175 million to replenish an overdrawn account at JPMorgan Chase in London. The transfer, the e-mail said, was a “House Wire,” meaning that it came from the firm’s own money. The e-mail, sent at 2:20 p.m. on Oct. 28 to Mr. Corzine and two of his assistants in New York, says the transfer came from a “nonseg” account, industry speak for a noncustomer account. More in the New York Times [...]

Mets owners out millions, but act like winners

At a time when Bud Selig declares himself the victor in MLB’s war on drugs — when as top cop he kept busy counting the house as anabolic sluggers destroyed records and put The Game in disrepute — and at a time when Roger Goodell claims the double-whack PSLs that drove out thousands of Jets and Giants patrons make “good investments” and additionally claims, “It’s all about the fans” — when it’s all about the money — why not? Why shouldn’t Fred Wilpon and Co. declare that by reaching a $162.5 million settlement for their ask-no-questions, dirty money-taking scam — Wilpon and Co.’s second Ponzi settlement in the last five years — that they’re winners? More in the New York Post [...]

New ‘Clawback’ Suits Seek More Than $200 Million From Madoff Investors

With the New York Mets situation out of the way, the trustee liquidating Bernard Madoff’s investment firm continues to pursue his “clawbacks” against less-publicized former Madoff clients, filing seven new lawsuits Thursday and Friday seeking a total of more than $200 million from banks and investment firms. In separate filings with the U.S. Bankruptcy Court in Manhattan, trustee Irving Picard sued investors in the Fairfield Sentry and Kingate Global funds, two British Virgin Islands “feeder funds” that funneled 95% or more of their clients’ money into Bernard L. Madoff Investment Securities LLC before the December 2008 discovery that Madoff’s firm was actually an epic Ponzi scheme. More on Fox Business News [...]


Click here to view the text of the Wall Street Journal editorial “Hoist By His Own Picard” from the Friday, March 23 Special News [...]