Madoff Victims Investigated
The Wall Street Journal is reporting that…”The criminal investigation into who knew about Bernard L. Madoff’s massive fraud has expanded to include some of his highest-profile investors, according to people familiar with the matter.
Jeffry Picower and Stanley Chais, two philanthropists who invested heavily with Mr. Madoff, and Carl Shapiro, one of the money manager’s oldest friends, are among at least eight Madoff investors and associates being scrutinized by the U.S. attorney’s office in Manhattan, these people said.
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Trustee: Nearly 9,000 claims in Madoff scam
By Tom Hays, Associated Press
NEW YORK (AP) — A court-appointed trustee unraveling Bernard Madoff’s massive fraud signaled Thursday that he may go after the disgraced financier’s family to pay victim claims, which have grown to almost 9,000.
Legal action against the family “is a matter that’s being looked into,” trustee Irving Picard said during a telephone conference call with reporters.
Picard already has filed lawsuits in bankruptcy court in Manhattan to try to force hedge funds and other large investors to return $10.1 billion in fictitious profits paid by Madoff’s firm, alleging they should have known about the fraud. As of Wednesday, there were 8,848 customers claiming losses, he said.
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Suit: Madoff Family Got Ponzi Funds Article
By AMIR EFRATI, The Wall Street Journal (5/6/09)
Bernard Madoff used the fruits of his multibillion-dollar Ponzi scheme to lend millions to his brother and son, support his relatives’ business ventures and pay corporate card bills of his daughter in law, sister in law and captain of his boat, according to a court filing Tuesday.
Federal prosecutors previously said that Mr. Madoff used funds from his firm to benefit family members, and they have said they intend to try seizing millions of dollars of assets from Mr. Madoff’s wife, Ruth, and as well as $32 million of loans Mr. Madoff made to his sons, Andrew and Mark, who worked at the Madoff firm.
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Trustee Announces Winning Bid of up to $25.5 Million for Madoff Market Maker Business
From PRNewswire.com
Irving H. Picard, the SIPA Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC (“BLMIS”), announced that following the completion of the Bankruptcy Court approved auction conducted today at the midtown Manhattan offices of Baker Hostetler, where Mr. Picard and his counsel are based, Castor Pollux Securities LLC (“Castor Pollux”) is the winning bidder for the acquisition of the assets related to the market making business of BLMIS. Castor Pollux will pay $1,000,000 at closing and up to $24.5 million in deferred compensation through December 2013. Three bidders competed in the auction. One entity that had submitted a bid on April 22, 2009 withdrew its bid prior to the auction.
On March 27, 2009, the Trustee entered into a definitive agreement with Castor Pollux, subject to higher and better offers, for the sale of the market making business. That bid was for $500,000 to be paid at closing and payments of up to $15 million based on gross revenues generated and shares traded through 2012. As a result of the auction, the closing date cash consideration is twice what was initially proposed and the earn-out consideration is also substantially higher than the original bid.
“The auction today yielded a higher and better offer for the market making business. The additional consideration that we will receive as a result of the auction will benefit Madoff’s victims. Not only is the initial payment higher than the original bid, the transaction allows Madoff’s victims to participate in future earnings of the business in a higher amount than the original bid,” said Mr. Picard. Trustee Picard also noted that all of the costs associated with the marketing and sale of the market making assets have been funded by the Securities Investor Protection Corporation.
The Bankruptcy Court will hold a hearing on April 30, 2009 where the Trustee will present the winning bid to the Court for approval.
Madoff Trustee Demands Investors Return $735 Million
By Christopher Scinta, Linda Sandler and David Voreacos, Bloomberg.com (4/23/09)
The trustee liquidating Bernard Madoff’s defunct money management firm told 223 investors to return as much as $735 million or face legal action, said a person familiar with the matter.
“The trustee demands that you immediately return such amounts to the trustee for the benefit of all defrauded creditors” of Bernard L. Madoff Investment Securities LLC, according to a copy of the letter obtained by Bloomberg News.
Trustee Irving Picard mailed the so-called clawback letters to customers who redeemed investments over the past six years, the maximum period for which he can seek recovery under New York law, according to the person. Picard contacted mostly individuals, not so-called feeder funds, the person said. The 223 letters constitute the bulk of expected clawback letters, according to the person.
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Two More Funds, Managers Sued Over Investments With Madoff
From The Wall St Journal
Two more funds and their fund managers have been sued in separate lawsuits for allegedly breaching their fiduciary duties in entrusting client money with convicted Ponzi-scheme operator Bernard Madoff.
Hedge fund of funds Meridian Capital Partners and its investment manager, Meridian Diversified Fund Management LLC, were sued Monday in a lawsuit in U.S. District Court in Manhattan, while fund managers J.P. Jeanneret Associates Inc. and Ivy Asset Management Corp. and Ivy’s parent Bank of New York Mellon Corp. (BK) were sued Friday in U.S. District Court in White Plains, N.Y.
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Unions say they lost $1B
Money in pension, benefit funds placed by investment manager with Bernard Madoff
By Eric Anderson, Deputy business editor, timesunion.com
A group of upstate unions claims it lost nearly $1 billion in pension and other benefit funds after an investment manager placed the money with Bernard Madoff Investment Securities LLC.
Now, the unions have filed a class-action lawsuit against the adviser, Syracuse-based J.P. Jeanneret Associates Inc. and against White Plains-based Beacon Associates Management, which operated funds that invested pension money with Madoff.
Principal Bernard Madoff pleaded guilty last month to directing the largest Ponzi scheme in U.S. history — involving more than $50 billion.
The figure on the $1 billion estimated loss by the unions is included in a complaint filed April 2 in U.S. District Court in Rochester.
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Trustee for Madoff firm in U.S. sues Kingate funds
From Reuters.com
The trustee recovering money for the defrauded customers of swindler Bernard Madoff’s firm has sued Kingate Global Fund Ltd, Kingate Euro Fund Ltd and Bank of Bermuda Ltd for the return of $255 million.
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Madoff Trustee Seeks $150 Million From Gibraltar Bank
By Christopher Scinta and David Glovin, Bloomberg.com
The trustee appointed to liquidate Bernard L. Madoff Investment Securities LLC is seeking $150 million transferred from the firm to Banque Jacob Safra (Gibraltar) Ltd., the first such action aimed at recovering assets withdrawn by a Madoff client.
Irving Picard, appointed under the Securities Investor Protection Act, filed the lawsuit today in U.S. Bankruptcy Court in New York. The October transfer was for the benefit of British Virgin Islands-based Vizcaya Partners Ltd., also named as a defendant.
“The Trustee seeks to set aside such transfer and preserve the property for the benefit of BLMIS’s defrauded customers,” according to the complaint filed by Picard’s lawyers at Baker & Hostetler LLP.
The Vizcaya account was opened on Dec. 21, 2001, by its custodian, Banque Safra-France SA, and Vizcaya invested $327.2 million with Madoff through 26 wire transfers to an account at JPMorgan Chase & Co. in New York beginning in January 2002, according to the complaint.
Banque Jacob Safra (Gibraltar) is based in London and operates in Gibraltar. Picard has said he is seeking assets in Gibraltar and recently sought permission to hire lawyers to represent him there.
Banque Safra-France is a unit of Banque Safra-Luxembourg SA, a closely held bank based in Luxembourg. A message left at Banque Safra’s Geneva office wasn’t immediately answered. Efforts to contact Vizcaya were unsuccessful.
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Madoff moola trackers seek $80M in Bermuda
By Thomas Zambito, DailyNews.com
Bermuda joined the growing list of overseas outposts where Ponzi swindler Bernard Madoff may have stashed cash.
The court-appointed trustee tracking down Madoff assets across the globe Wednesday asked a federal bankruptcy court judge to let him hire a law firm to recover $80 million held at the Bank of Bermuda.
Trustee Irving Picard says the cash belongs to Madoff victims. In recent weeks, Picard has has sought court permission to hire law firms to track down Madoff assets in Gibraltar and Luxembourg.
The Bermuda law firm, Williams Barristers & Attorneys, is being hired for its expertise in liquidation proceedings in the Cayman Islands, a popular offshore banking haven.
Also yesterday, Madoff’s tickets to the Mets season opener against the San Diego Padres on April 13 went up for sale on eBay. The pair of home plate-area seats in Section 11, Row 8 received just one bid for $800 yesterday afternoon.
Picard wants to auction off Madoff’s entire season ticket package, complete with a parking pass and an option to renew next year. Bidding will start at $30,375 – half the value of the Section 11 seats.