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‘Chasing Madoff’ investigates 10 years of investigative work

Harry Markopolos is the main draw in Chasing Madoff, an exciting, yet too short documentary about business villain Bernie Madoff and the Ponzi scheme heard round the world. Markopolos spent 10 years with a team of investigators trying to figure out the funny numbers coming from Madoff. More on Hollywood Soapbox [...]

JP Morgan Chase, Bernie Madoff’s $64.8 Billion Ponzi Scheme and Crime on Wall Street

As the headlines have made clear for years, JP Morgan Chase has a long rap sheet of illegal conduct and, although overlooked, it includes enabling Bernie Madoff’s $64.8 billion Ponzi scheme, the largest in history, which caused net losses of more than $17 billion and untold human wreckage. More in The Huffington Post [...]

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Texan Allen Stanford first appeared on the radars of financial regulators in 1997. Julie Preuitt, then a branch chief in the SEC’s Fort Worth Broker-Dealer Examination group, was becoming “very concerned” about the “extraordinary revenue” Stanford claimed to me making in his investment fund. It took authorities more than 12 years until Stanford was charged with a crime.Texan Allen Stanford first appeared on the radars of financial regulators in 1997. Julie Preuitt, then a branch chief in the SEC’s Fort Worth Broker-Dealer Examination group, was becoming “very concerned” about the “extraordinary revenue” Stanford claimed to me making in his investment fund. It took authorities more than 12 years until Stanford was charged with a crime. More in FinAlternatives [...]

Nearly $600 Million More Coming to Madoff Victims

Nearly $600 million worth of settlements to benefit victims of Bernard Madoff ’s massive Ponzi scheme on Wednesday won the blessing of a bankruptcy judge. The settlements, approved by Judge Stuart Bernstein at a hearing in the U.S. Bankruptcy Court in Manhattan, include a $95 million deal struck with Senator Fund SPC and a $497 million deal to collect money from Herald Fund SPC and Primeo Fund. All of the funds had invested with Mr. Madoff, who is currently serving a 150-year prison sentence. Irving Picard , the official tasked with paying back Mr. Madoff’s victims, has to date collected or reached deals to collect approximately $10.5 billion of the $17.3 billion in principal that investors lost upon the 2008 collapse of the Ponzi scheme. Of the recovered funds, more than $5 billion has been returned to investors. More in the Wall Street Journal [...]

Ex-Madoff Aide Gets 6 Year Term For Aiding Ponzi Scheme

Joann Crupi, who managed investment advisory accounts for Ponzi scheme mastermind Bernard Madoff, got a six-year term for aiding his $17.5 billion fraud, the last of five sentences stemming from the only criminal trial over the massive swindle. Crupi’s punishment, like those of her co-defendants, was less than what U.S. probation officials recommended, 14 years, and the even longer term the government had sought. U.S. District Judge Laura Taylor Swain in Manhattan, who presided over the case, has cited the fundamental responsibility of Madoff, rather than his aides, as a key reason for leniency, saying he manipulated loyal employees like Crupi, who lacked any financial training. Swain said Crupi, 53, appeared to be “an intelligent person who is capable of questioning established practices,” yet did not do so while working for Madoff. She started working at the firm as a keypunch, entering what was probably fraudulent trading information provided by her superiors, rose through the ranks and “was compliant in everything and questioned little,” the judge said. More on Bloomberg [...]

Forward Motions: Judge to Consider Madoff Feeder Fund Settlements

A series of settlements to benefit victims of Bernard Madoff’s massive Ponzi scheme will go before a bankruptcy judge Wednesday in Manhattan for final approval. The settlements include a $95 million deal struck with Senator Fund SPC, an investment fund that parked all of its money with Mr. Madoff, and a $497 million deal to collect money from Herald Fund SPC and Primeo Fund. Irving Picard, the official tasked with paying back Mr. Madoff’s victims, has to date collected or reached deals to collect approximately $10.5 billion of the $17.3 billion in principal that investors lost upon the collapse of the Ponzi scheme. Of the recovered funds, nearly $6 billion has been returned to investors. More in the Wall Street Journal [...]

Madoff’s minions shouldn’t get off so easily

Starting with the Enron scandal and continuing through several other high-profile cases, prosecutors and judges were making reasonable strides in countering the public’s long-held belief that white-collar crimes go unpunished. Heavy sentences have been handed down in various cases, including for executives at WorldCom Inc., and Adelphia Communications Corp., mostly for fraud. Financial swindler Bernard Madoff also was found guilty and sentenced to 150 years in prison for masterminding a massive Ponzi scheme in which investors were swindled out of tens of billions of dollars. But that momentum has seemingly hit a wall. In fact, a prosecutor has just correctly lashed out at a judge for a rather lenient sentence meted out to one Madoff’s former employees. More in the Poughkeepsie Journal [...]

Mutual Fund Industry May Face New Rules

Mutual funds are intended to be mom-and-pop financial products whose investments can be sold off quickly. The funds were never meant to pile into markets where trades take weeks to complete. Some mutual funds, however, have lately been making bets that might be hard to get out of, especially in difficult market conditions. The stampede into investments that can be difficult to exit has regulators increasingly concerned. On Thursday, Mary Jo White, the chairwoman of the Securities and Exchange Commission, told a conference organized by The New York Times/DealBook that the agency was undertaking a comprehensive review of the mutual fund sector. One of the review’s major objectives is to assess whether some mutual funds are loading up on investments that would take too long to unwind. More in the New York Times [...]

SEC chair: No ‘drop-dead date’ for equity crowdfunding rules

The Securities and Exchange Commission is in no rush to finalize equity crowdfunding rules, despite having already missed its Congressionally-mandated deadline by around two years. Following her speech this morning at the Dealbook Conference, SEC chair Mary Jo White told Fortune that her agency does not believe it has any “drop dead date” to complete its rule-making. “We’ve gotten a lot of comments [on proposed equity crowdfunding rules] and our staff is actively working through them,” she added. More in Fortune [...]

Did insider trading just change forever?

The future of insider trading is here, and it will probably be harder to prosecute. A federal appeals court decision Wednesday significantly redefined insider trading and may have altered the course of all further enforcement, experts said. The court’s findings, which overturned convictions for former hedge fund managers Todd Newman and Anthony Chiasson, place a much higher burden on prosecutors and could even change how business is done on Wall Street, legal experts said. “The stunning decision … has the potential to rewrite the book on insider trading, while also dealing a body blow” to Justice Department and the Securities and Exchange Commission efforts, former assistant U.S. attorney Patrick Cotter said in a statement to CNBC. More on CNBC [...]