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HomeMadoff CFO, Frank DiPascali, Singing Like a Canary
Posted by Larry Doyle on August 9th, 2009 11:54 AM |
Frank DiPascali, CFO for Bernie Madoff, is widely expected to plead guilty this Tuesday. DiPascali has waived his right to be indicted by a grand jury in a sign that he is looking to cut the best deal possible.
How high a pitch and how many tunes will investigators receive from the canary known as Frank DiPascali? Do you think there are a whole host of people not sleeping very well lately wondering what notes Mr. DiPascali may reach?
Who might some of these people be?
1. Walter Noel: head of Madoff’s largest feeder fund, Fairfield Greenwich.
2. Sandra Manzke: formerly headed Tremont Advisors, another large feeder fund. Manzke left Tremont in 2006 and launched a money management firm Maxam.
3. Andrew and Mark Madoff: Bernie’s sons ran the Madoff broker-dealer operation.
4. Peter Madoff: Bernie’s brother and general counsel.
5. Shana Madoff and husband Eric Swanson: Shana, Bernie’s niece, married former SEC lawyer Swanson in 2007. Swanson was with the SEC for ten years prior to departing in 2006. Ms. Madoff served on a committee at the Wall Street regulator FINRA.
6. Robert Jaffe: vice-president of Cohmad Securities. Jaffe was instrumental in signing up a multitude of investors with Madoff.
7. Sonny and Marcia Cohn: this father-daughter team owned Cohmad Securities, which was physically located within the same space as Madoff’s operations.
8. Certain large Madoff investors with whom DiPascali had regular contact. How much did they know?
9. Who were the regulators from FINRA and the SEC responsible for monitoring the Madoff operation? Are they nervous as well? Will investigators dare to pursue this angle?
Obviously, if any of these individuals (and any others) are implicated by DiPascali, they are entitled to due process.
I would love to see Mr. Harry Markopolos reintroduced into this equation. Mr. Markopolos clearly knew the inner workings of the Madoff operation. Will investigators have the courage to engage him and expose the shortcomings in our regulatory oversight?
No stone should be left unturned!!
LD
Madoff Sentencing Only the Beginning
Posted by Larry Doyle on June 29th, 2009 12:16 PM |
Bernie Madoff
Today Bernie Madoff learns his sentence. With this sentence, just now released as the maximum 150 years, Bernie Madoff learns how he will ‘exist’ for the balance of his ‘life.’ Today does not represent the end of the pursuit of justice in this massive fraud, but truly the beginning.
Victims of crime typically look for justice in two forms: restitution and justice “for all” parties involved.
The victims of the Madoff Ponzi scheme will be lucky to receive a small percentage of the monies invested in this fraud. The money is obviously extremely important to all the victims, but there is much more to justice than that.
For justice to truly be served, all of those who aided and abetted this fraud must also be brought to justice and pay the maximum price. To think that Bernie Madoff managed this scheme by himself is beyond naive. The Wall Street Journal highlights as much in writing, For Victims, Downsized Lives and Many Shattered Dreams:
“I hope he has to go to jail forever,” said Sheila Ennis, 63, of Manhattan Beach, Calif. “I hope they get all his assets, and I do feel others were involved. But now it’s a question of how we fix things for ourselves.”
Not unlike losing a loved one, victims of crime also need closure. That closure is only possible when every individual involved in the crime pays!! A financial settlement with Ruth Madoff should not preclude a potential indictment of her or her sons. Others directly and indirectly involved in this fraud also need to be fully investigated. To do otherwise would be a miscarriage of justice. If those investigations were to cross into government offices, then so be it, because justice neglected is justice denied!
Make no mistake, the fact that Madoff received the maximum allowable sentence is also an indictment of the SEC. Why? The fact that the Madoff Ponzi scheme grew as large as it did was simply a function of the culpability of the SEC. All those at the SEC who never pursued the Madoff fraud over the years should feel real personal and professional shame today.
As we move forward, I can only hope that our country and all who love it view the Madoff sentencing not only as the beginning of justice for the Madoff victims, but also the beginning of real transparency for victims of all financial frauds.
As I write this, though, I am reminded of the thousands of investors and tens of billions of dollars still frozen in Auction-Rate Securities. Those investors have neither restitution, nor justice, nor real media or judicial investigations truly working for them.
As a nation, we have a long way to go to regain our moral stature and promote our markets as being free and open for all.
LD
Bernie Madoff Deserves Special Treatment
Posted by Larry Doyle on June 23rd, 2009 4:13 PM |
Bernie Madoff
I may stand outside of the mainstream, but I believe Bernie Madoff deserves special treatment when his sentence is handed down on June 29th.
No surprise that Bernie stays true to his cowardice form in begging for mercy from the court, as the Wall Street Journal offers Madoff Seeks Leniency in Sentence:
Bernard Madoff asked a federal judge on Tuesday to sentence him to as little as 12 years in prison after he pleaded guilty earlier this year to operating a massive, decades-long Ponzi scheme.
Talk about chutzpah. Wow!!! Does Bernie think he was involved in a pedestrian white collar financial scam? His lawyer, Ira Sorkin, also provides comic relief in his request:
In a letter filed late Monday and made public Tuesday, Ira Sorkin, a lawyer for Mr. Madoff, asked U.S. District Judge Denny Chin to sentence his client to less than a life sentence.
“Mr. Madoff is currently 71 years old and has an approximate life expectancy of 13 years,” Mr. Sorkin said. “A prison term of 12 years — just short of an effective life sentence — will sufficiently address the goals of deterrence, protecting the public and promoting respect for the law without being ‘greater than necessary’ to achieve them.”
In the alternative, Mr. Sorkin said a sentence of 15 years to 20 years would effectively achieve those goals. “Indeed, such a range will appropriately eliminate concerns for disparate treatment among similarly situated nonviolent offenders,” Mr. Sorkin said.
Is Mr. Sorkin serious? Let’s review his statement: ” . . . eliminate concerns for disparate treatment among similarly situated nonviolent offenders.”
Who has a concern that Bernie will be treated worse? What crimes and criminals bear any resemblance to the Madoff fraud?
Nonviolent offenders? When will our judicial system properly dispense justice for emotional abuse inflicted upon victims in the course of white collar crimes? Why has our judicial process allowed white collar criminals to define their crimes as nonviolent and thus deserving of lessened penalties?
I strongly believe that white collar crimes and criminals are treated far too gently in our judicial sentencing process.
Thus, if I were to sentence Bernie Madoff, I would first want to know how many investors were in his fund. If there were 1000 investors, I would recommend one life sentence per investor, that is, 1000 concurrent life sentences. Why?
I believe each investor is now in an emotional jail cell and likely will be for the remainder of his/her life. Thus, this sentence is the only fair sentence to address that emotional pain and torture.
I do not consider myself a vindictive individual. In fact, I consider myself honest, charitable, and fair. I would welcome hearing the rationale as to how true justice may otherwise be dispensed. That sentence strikes me as fair for all involved.
I have to believe there is a special place in hell for Bernie Madoff.
LD
Low Tide Will Reveal Rats Scurrying Amidst The Garbage
Posted by Larry Doyle on April 28th, 2009 9:09 AM |
Every exterminator will tell you that he never finds just one rat. Bernie Madoff has been exposed as an enormous rodent. Is Allen Stanford also a rat? Who else may be in the pack? Mary Schapiro, head of the SEC, revealed yesterday that the SEC is reviewing 150 other hedge funds to determine whether they also operated Ponzi schemes. Reuters reports, U.S. SEC Has About 150 Hedge Fund Probes.
Hedge funds are currently unregulated. How could the SEC have found potentially another 150 “rats” in the space of a mere three months since Ms. Schapiro has been on the job? My instincts lead me to believe the following:
1. Ms. Schapiro is trying to convey a sense of leadership and progress on fraud investigations after the abysmal performance on the Madoff scheme. The SEC needs to burnish its image and Ms. Schapiro is trying to address that with this news release.
2. I have no doubt that many other hedge funds did operate as Ponzi schemes and likely had money invested in Madoff knowing he was the largest rat. As investigators from the SEC have reviewed the list of Madoff investors, the info there has likely led to other hedge fund frauds.
Additionally, do not forget that many hedge funds suspended redemptions in the latter half of 2008. Ponzi schemes, like rats, only thrive given a steady source of food and water in the form new investments. Suspending redemptions is akin to a rat rationing its food supply. While plenty of those suspensions could be legitimate, it would be naive to think that all of them are.
3. We know that FINRA, the self-regulatory organization overseeing Wall Street, had investments in hedge funds, fund of funds, and private equity. That info was provided in the FINRA 2007 Annual Report. We are STILL waiting for the release of the FINRA 2008 Annual Report. Could FINRA have invested in Madoff? Could FINRA have invested in other hedge fund Ponzi schemes? Why by April 28th has FINRA still not released their Annual Report? (more…)
Bernie Madoff, May You Burn, Baby, Burn
Posted by Larry Doyle on April 11th, 2009 1:00 PM |
With everything else going on in the world of global finance these days, I have been remiss in not commenting on Bernie Madoff. I saw a clip a week or so ago showing the “hellhole” in which he currently exists in Lower Manhattan. Even for a hellhole, he deserves worse.
Aside from that, I have heard speculation from a variety of sources that his wife Ruth was very deeply involved in the masterminding and execution of the scam. In addition, there have been clips – although not widely broadcasted – openly speculating that Bernie was closely connected to organized crime.
This story certainly goes beyond Bernie Madoff, and I can only hope that our authorities get to the bottom of it. The authorities would do well to engage Harry Markopolos in the process.
The FT provides a fabulous overview of the Madoff list of victims: Where Is Madoff’s $50 Bln Loss?
For my newer readers, you may be interested in reviewing my piece when the Madoff story broke: How Bernie “Madoff” With $50 Billion.
LD
Market Fades on the Close
Posted by Larry Doyle on March 16th, 2009 6:30 PM |
Monday’s price action in the equity markets was particularly interesting. The market opened firm, up approximately 1%, and continued to trade with a very firm tone all day. What precipitated the strong tone? Fed chair Ben Bernanke was interviewed on 60 Minutes last evening. On that show, Bernanke Defends Recovery Efforts in Rare TV Interview.
First and foremost, it is very uncharacteristic for anybody from the Fed to consent to an interview targeted at a general audience. I view this as Bernanke trying to make the case for himself, the Fed, and the economy during these challenging times. In fairly short order, Bernanke has gained significantly greater credibility than his colleague, Secretary Geithner. Bernanke also spoke well of the economy turning around later this year IF the financial system recovers. That is a mighty big IF!! (more…)
FROM THE ARCHIVES: How Bernie “Madoff” with $50 Billion
Posted by Larry Doyle on March 12th, 2009 10:44 AM |
Bernie Madoff pleaded guilty to his Ponzi scheme today. I thought it would be timely to post my piece from December 14, 2008:
The neighborhood of Far Rockaway in Queens, NY epitomizes the essence of middle income urban life. To say that the kids from this neighborhood develop “street smarts” at a very early age is a huge understatement.
Hustlers of every strain, predominantly positive in nature, grow up early in Rockaway. The movie, “Flamingo Kid,” starring Matt Dillon is set in Rockaway Beach. From the beaches in Rockaway one could see the Twin Towers off in the distance. Dreams of fortunes and fame earned on Wall St. drove many with real ambition. Bernie Madoff was one of those boys filled with ambition. However, while ambition can be an amazingly powerful force, if left unchecked it can be fatal.
When the tide is high and the surf is pounding in Rockaway, the kids frolic and never want to come out of the water. However, when the tide goes out, the ocean can leave a few gems. Often times, though, the waves leave a mix of driftwood and waste and a very unpleasant, if not putrid, odor.
Bernie Madoff
In similar fashion, in 2008 the tide on Wall St. has gone out. While there will be some gems amidst the rubble, it is also mostly a mix of driftwood and waste left upon the shore. Just as at times large fish are trapped and die as the tide recedes, this past Thursday, the unchecked ambition from one of Rockaway’s boys finally caught up with him and in so doing left the biggest “carcass” in the person of Bernard Madoff on the shore for all to observe.
How is it that this “fish” which appeared to be the marvel that created wonderment in the form of outsized financial returns for so many for so long was actually a shark that enveloped and ultimately devoured his followers? Let’s enter the world of this “shark.”
No Justice!! No Confidence!!
Posted by Larry Doyle on March 9th, 2009 10:38 AM |
All indications point to a plea deal this week with Bernie Madoff. In my opinion, Bernie Madoff seems to have been treated with kid gloves to this point. House arrest for a purported crime of this magnitude defies logic. One can only assume the government
Bernie Madoff
utilized this approach, even after Bernie shipped jewels and assets overseas, as they were trying to extract as much information as possible. This week’s news will give the public the first hint as to what kind of information the government has extracted.
My father was an assistant district attorney in Suffolk County, MA and has often made the point that white collar crime never received the degree of justice it deserved. The crime that Bernie and team propagated not only directly impacted his investors but also massively impacted the public at large. How is that? Bernie’s Ponzi scheme, perpetrated over such an extended period of time, has caused a crisis of confidence in our markets, our regulatory system, and ultimately our country.
It defies logic that this Ponzi scheme was not executed without enormous cooperation and involvement by a number of individuals both inside and outside the Madoff organization. There is no doubt in my mind that many of those individuals have information, that if revealed, can and will be extremely embarrassing for some high profile people within our regulatory bodies and our government. (more…)
Cheaters Never Win
Posted by Larry Doyle on February 12th, 2009 7:34 PM |
While our country has had high profile cheats such as Bernie Madoff, Barry Bonds, and the crowd from Enron amongst MANY others, we have other cheats permeating our lives every day. Tim Geithner offered that “he screwed up” on his taxes and Alex Rodriguez claimed that he was young and naive from 2001-2003 when he took steroids. In my opinion, I believe both of these individuals are representative of a society that has become far too lax in tolerating a lack of decency and integrity. This is not good business!!
In the midst of the current economic turmoil, we all want to look for individuals, groups, parties, and/or industries that are culpable and direct our indignation towards them. While we may gain some sort of short term gratification, are we changing the nature of the dialogue and in turn the course of our country? I think not.
The opportunity for the “silent majority” within the American public to voice their opinion, promote real core values of decency and accountability, and “lead” our country has never been greater. (more…)
