Madoff Ex-Accountant Tells Jury Aide Helped Fudge Taxes

Bernard Madoff and his wife chose the exact amount of personal tax they would pay each year with the help of fake documents provided by a top aide on trial over the con man’s $17 billion fraud, a jury was told. Daniel Bonventre, one of five former Madoff employees on trial in Manhattan, prepared false general ledgers and corporate profit statements to help reach what Madoff called “fudged” numbers for tax filings, David Friehling, Madoff’s accountant for more than 20 years, testified yesterday. More on Bloomberg [...]

Legislative Alert - 11/12/13


  • Garrett & Maloney to introduce legislation in House. Senator Vitter current lead sponsor in Senate
  • House hearings set for 11/21
  • Selective grassroots to commence
  • 5th Anniversary media needs victims willing to be interviewed by media
  • NIAP is excited to announce that SIPC legislation is to be introduced later this week or early next followed by Congressional hearings on Thursday, Nov 21. The legislation is to be jointly introduced by Congressman Garrett (NJ) and Congresswoman Carolyn Maloney (NY). Similar legislation is expected to be introduced shortly in the Senate as well, consistent with the strategy laid out by Congressman Garrett in the last Congress.

    The intention is to have the legislation introduced by approximately 15 co-sponsors, and followed by an extensive outreach effort via Garrett’s and Maloney’s offices, our lobby team and our own grassroots efforts to ramp up sponsorship numbers.

    The specific bill language is still going through final stages, and a bill number and title will be finalized shortly. We will make the bill public as soon as we receive the final version. As you probably know, it prevents clawback of the innocent, insures SIPC payments to $500,000 based on account statements, and gives the SEC authority over SIPC.

    After hearings, the bill will be moved to a mark-up session in the House Subcommittee on Capital Markets, voted on and moved to the Financial Services Committee.

    Next Steps on Grassroots. We will want to focus our House grassroots efforts on key Financial Services Committee members, as well as other influential House members, particularly those in districts or states with sizeable Madoff and Stanford victim constituents. Our Senate strategy will focus on Senate members on the Senate Banking Committee and other key Senate members.

    The first wave of Grassroots letters and communications however will go out to those who are sponsoring the legislation at introduction, thanking them for their support and encouraging their reaching out to their colleagues to do the same.
    Stay Tuned! In the coming days we will be providing more detailed information, as well as laying out the details for the grassroots outreach. We will also undertake a rapid fundraising campaign to assist costs of Congressional hearings and grassroots support.

    We look forward to working with all previous and current leaders in this effort as well. [...]

    Wall Street watchdog eyes new rule for clearing firm data

    Wall Street’s industry-funded watchdog is developing a new rule that would require clearing firms to regularly provide it with data about brokerage transactions, U.S. regulators said on Tuesday. The Financial Industry Regulatory Authority would use that information to conduct more robust examinations of the securities brokerage industry, said Richard Ketchum, the regulator’s chairman and chief executive. More on Reuters [...]

    SEC shows leniency to hedge-fund administrator in a first for agency

    A former hedge-fund administrator will get a break for helping the Securities and Exchange Commission uncover fraud at the fund, an agreement that marks a first for the agency and makes use of a concept pioneered by its current chairman decades ago. The SEC announced Tuesday that it will forego significant enforcement action against Scott Herckis because he flagged the agency to misconduct that fleeced investors of $1.5 million. More in the Washington Post [...]

    Corzine, banks fail to win dismissal of MF Global lawsuit

    A federal judge on Tuesday rejected a bid by former MF Global Holdings Ltd chief executive Jon Corzine to dismiss investor litigation seeking to hold him, other executives and many banks responsible for the futures brokerage’s rapid collapse. In a sometimes acerbic decision that likened MF Global’s demise to a “massive train wreck,” U.S. District Judge Victor Marrero in Manhattan rejected the defendants’ contention that the company’s October 31, 2011, bankruptcy was beyond their control, and not the product of securities fraud. More on Reuters [...]

    5-ex Madoff employees on trial in NYC for fraud

    In the many years he spent as a trader at Bernard L. Madoff Investment Securities LLC, David Kugel learned that investments that Madoff claimed to be making for clients were fiction. Kugel, 68, knew that because he was instrumental in concocting the phony trades. But he always kept his mouth shut. More from the Associated Press [...]

    Supreme Court asked to hear Madoff-related case

    An investor protection body has joined the legal battle asking the Supreme Court to decide whether JPMorgan Chase and other banks should pay for failing to take more aggressive action against Bernard Madoff’s multi-billion dollar fraud scheme. The Securities Investor Protection Corporation argued in a Nov. 8 filing that the trustee appointed to recover money on behalf of victimized Madoff investors should be authorized to seek funds from JPMorgan, Swiss banking giant UBS, global bank HSBC and other financial institutions. More on USA Today [...]

    JPMorgan Banker Backed $200 Million Madoff Loan in 2008

    A former JPMorgan Chase & Co.banker who managed Bernard Madoff’s account said the con man was on track to receive a $200 million loan less than a month before his arrest if the request hadn’t been dropped. Daniel Bonventre, one of five ex-Madoff employees on trial for allegedly aiding the fraud, asked JPMorgan in November 2008 to borrow twice Madoff’s credit limit of $100 million, with U.S. Treasuries as collateral, Mark Doctoroff, who left the bank last year, testified yesterday in federal court in Manhattan. More on Bloomberg [...]

    CORRECTED-Securities watchdog fast-tracks action on risky brokers

    Wall Street’s industry-funded watchdog is trying to fast-track investigations and disciplinary cases involving risky brokers who may pose the greatest threats to the investing public, an official said on Wednesday. Brokers who already have “an extensive disciplinary history with numerous substantive complaints” could be barred from the industry more quickly as a result of the change, said Susan Axelrod, head of regulatory operations for the Financial Industry Regulatory Authority. More on Reuters [...]

    CME Will Speed Repayment to MF Global Customers

    CME Group Inc. plans to hand over to futures traders half the money CME is owed by MF Global Inc., helping repay the failed brokerage’s former customers more quickly. CME’s move came a day after a New York bankruptcy court judge approved a plan for MF Global’s brokerage to pay back 100% of the money owed to its U.S. and overseas commodity customers, just over two years after the firm’s collapse.
    More in the Wall Street Journal [...]