Madoff aide didn’t tell in-laws of Ponzi scheme

The star prosecution witness against five of Ponzi scheme mastermind Bernard Madoff’s ex-employees ended his testimony Wednesday by acknowledging evidence that shows he didn’t tell in-laws the massive scam was imploding. Frank DiPascali, Madoff’s former finance chief, testified earlier that the now-disgraced financier told him he was running out of money on Dec. 3, 2008. Madoff surrendered to authorities eight days later, ending a decades-long fraud that stole more than $17.3 billion from ordinary investors, charities, celebrities and others. More on USA Today [...]

Madoff Ex-Finance Chief Changes Testimony on Scam Insight

Bernard Madoff’s former finance chief contradicted himself in testimony about when he learned of his boss’s use of fake trades, casting possible doubt on the government’s key witness in the trial of five ex-Madoff workers. Frank DiPascali, who said he was Madoff’s “right-hand man” in the con man’s defunct investment-advisory business, said today in Manhattan federal court that he learned of the scheme to trick customers by 1992 instead of in the early 1970s — the time-frame he gave in testimony last month. Today is DiPascali’s 16th day under questioning on the stand. More on Bloomberg [...]

Madoff trustee wins court fight over Picower settlement

Two former investors with Bernard Madoff cannot pursue claims against the estate of a Florida businessman who was one of the convicted swindler’s biggest clients, a federal appeals court ruled on Monday. The decision by a three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan is a victory for Irving Picard, the trustee liquidating Madoff’s firm, in a battle over his authority to reach settlements on behalf of victims of Madoff’s Ponzi scheme. More on Reuters [...]

Securities industry seeks to slow U.S. municipal adviser regulation

The securities industry is seeking a one-month delay for a batch of new regulations governing financial advisers to U.S. cities and states, telling federal regulators firms have not had time to digest an official definition of advisers spanning more than 700 pages. That definition is expected to go into full effect next week, allowing federal regulators to begin tightening oversight of advisers who have long escaped government scrutiny. The Securities and Exchange Commission approved it in September. More on Reuters [...]

California Ponzi scheme victims get no relief from state tax bills

Bernice Tingle, 67, lost her life’s savings of over $1 million to a convicted Bay Area Ponzi scheme operator, who’s now serving 46 months in federal prison. The retired phone company manager says she now barely gets by on the income she has left. But state tax collectors came after her for $84,000 in taxes on the paper profits that she never got. The debt now is $135,000 with interest and penalty charges. Tingle got some relief from the IRS, thanks to a ruling helping victims of the more infamous Ponzi schemer Bernard L. Madoff. But California tax officials say they can’t provide a similar break without a new law. More in the Los Angeles Times [...]

Madoff Trustee Case Against Banks Draws Top Court Inquiry

The U.S. Supreme Court signaled interest in an appeal by the liquidator of Bernard Madoff’s firm, asking the Obama administration for advice on suits seeking $8 billion from banks alleged to have helped funnel money into his Ponzi scheme. The Madoff trustee, Irving Picard, is urging the justices to let him sue HSBC Holdings Plc (HSBA), UniCredit SpA (UCG) and UBS AG (UBSN) to recoup customer losses. A federal appeals court said Picard lacked authority to press those suits, and the justices today requested input from U.S. Solicitor General Donald Verrilli. More on Bloomberg [...]

Can the SEC stop Ponzi schemes now?

“We’re okay now,” says Judith Welling, sitting in her Battery Park apartment. Welling invested with Madoff because her late mother was invested with Madoff, at the encouragement of friends and investment advisors. Together, the mother and daughter had put in $500,000 by 1992. They thought it was safer than trading on the stock market. Obviously, they were wrong. Their savings were used to pay off other investors in Mr. Madoff’s fake investment fund. More on MarketPlace [...]

JPMorgan Lost Madoff in a Blizzard of Paper

Did JPMorgan Chase deliberately cover up Bernard L. Madoff’s fraud? The documents released this week by federal prosecutors do not show it did, and I suspect it did not. JPMorgan was penalized for failing to report “suspicious activity” in Mr. Madoff’s account at the bank — the account that took in money from the Ponzi investors and paid out withdrawals. More in the New York Times [...]

Senate’s Warren Seeks Disclosure Over Firms’ Wrongdoing

U.S. government agencies would have to provide “accessible and detailed” disclosure of settlements over corporate wrongdoing under a bill proposed by Senators Elizabeth Warren and Tom Coburn today. “Anytime an agency decides that an enforcement action is needed, but it is not willing to go to court, that agency should be willing to disclose the key terms and conditions,” Warren said in a statement. “Increased transparency will shut down back-room deal-making and ensure that Congress, citizens and watchdog groups can hold regulatory agencies accountable for strong and effective enforcement.” More on Bloomberg [...]

JPMorgan’s Madoff Deal Stands Out Among Bad Deals

The $2 billion deal JPMorgan Chase cut with the government to make its Bernie Madoff problem go away truly stands out among the blizzard of recent giant settlements between the largest U.S. banks and the regulators paid to keep an eye on them. All of these deals have one thing in common: they allowed the banks to pay big fines in lieu of criminal prosecutions either of the bank itself or any individuals who might have been held culpable for alleged illegal activities. But remember this: while the fines look big in headlines they are usually spit in the ocean to the banks. More on Fox Business [...]