It’s a fine line, to be sure, but that’s what Frank Lautenberg is trying to ascertain and maybe recoup some losses in the process. The octogenarian senator’s family foundation has sued Peter Madoff, brother of Bernie, and chief compliance officer at Madoff Securities, a job which either entailed aiding and abetting the elder Mades in ripping off Kevin Bacon et al, or building elaborate towers out of sugar cubes for the last number of years. Here’s the complaint, via Dealbook. Obviously you’ll all agree that the best of the 17 “obvious material red flags evidencing the BMIS giant Ponzi scheme and repeated alerts of fraudulent activity that were recklessly ignored and/or not disclosed and/or consciously disregarded by Peter Madoff” is the one about no one being allowed on the office’s 17th floor, known as “THE CAGE.”
Lautenberg Foundation’s Suit Against Peter Madoff
Archive for February 2009
Bloomberg reports that Westgate Capital founder James Nicholson has been taken into custody by FBI agents, for allegedly dabbling in some securities fraud as early as 2004. Westgate’s only down month– working under the assumption they’re not messing with us– was back in September 2001, when they returned -0.64%, which a reader suggests was out of necessity to be seen as patriotic.
Westgate Strategic Growth Fund [PDF]
Well, they sure figured out how to avoid getting White Collar Criminal friendly Sarasota involved in the prosecution of accused fraudster Arthur Nadel. They charged him in New York as he traded through a brokerage in the city. Woops. And while we are at it, we’ll note that it looks unlikely that he is going to be able to swing penthouse arrest.
A U.S. judge set a $5 million bond, house detention and other conditions of bail on Wednesday for accused hedge fund manager Arthur Nadel, who authorities say was on the run for two weeks in January before the FBI arrested him.
Nadel’s lawyer indicated that his client will not be able to meet the conditions of release set by Judge Denise Cote at a hearing in U.S. District Court in Manhattan.
U.S. judge sets bail conditions for fund manager Nadel [Reuters]
10:03: Congresscritters wander into the hearing room.
Frank: There is no option other to work with the existing system. Sure, we have to bail out the bankers that you hate, but this is the first important step in totally revamping the financial system in the way we think it should be reconstructed. So just relax, jumpy public you. Relax. There will be plenty of time for hangings (easy there Waxman, we haven’t forgotten your dreams) once we [put out the fire/let the flood waters recede/quell the masses]. Really, what I’m trying to say is that without universal healthcare we just have no way to fix anything. Right? Right, ‘kay-thanks-bye.
Paul: I’ve been telling you idiots that this system has been doomed to failure for decades. Inflating this bubble again is a total misunderstanding. Hey, did you notice I shined up my congressional pin this morning? I was sort of expecting the cameras today, you know.
CNBC: Ok, we were here to watch the Beard, not you idiots. BREAKTIME.
(We should have just stuck with CSPAN).
Beard: Let me read from a dense stack of old economic texts with current events woven in to convince you that they are relevant to our activities over the last several weeks.
Dealbreaker Commenter: The guy over Bernanke’s right shoulder has an incredible amount of red hair.
Editor: That’s John Thain in disguise.
Barrett: How about judicial cramdowns? Huh?
Beard: Yeah, I’m going to just dodge that question, thanks.
Kanjorski: Hey, so the rumor is going around that we weren’t on the verge of disaster, and I’m sort of fearful that this will be used to argue that we are a bunch of idiots likely to do more harm than good. So, can you reassure us that we were totally fucked?
Beard: Yes… well…
Frank: You! With the pager! I’m going to stick this gavel where it doesn’t shine if you don’t turn that thing off.
Beard: Yeah, we were fucked. Seriously.
Paul: Seriously, what has to happen for you to think that stimulus might be a worthless joke or even a dangerous mistake?
Beard: Well, if inflation goes crazy, I’ll know I was wrong.
Paul: So if I were to ask you…
Frank: Nope! Time to vote! Everyone head for the playground! Not you, John Thain in disguise. You sit right there.
Crickets…
Frank: Sit your asses back down and let’s go.
Maloney: Hey, Obama got a lot of applause when he said the bank bailout was not about helping banks but about helping people. So, what do you think? Oh, and I have some homework for you to complete.
Perp walk in Greenwich: CNBC reports that Paul Greenwood and Stephen Walsh, principals of WG Trading are being held in FBI custody, for allegedly “‘mismanaging” clients’ money to the “sum of possible hundreds of millions of dollars.” No word on (yet) on which special needs community was targeted.
…is that a woman named Hayley Boesky, daughter of Ivan, will be heading TARP. Now, on the one hand, the most glaring reason this possibly smacks of BS is that Kashkari still has the job. On the other, Boesky Jr. did work (closely?) with Geithner at the NY Fed and she’s also an ex-Goldman MD, which might (or might not) still count for something. Perhaps she’s not heading but assisting? Or consulting? Or none of the above? Know anything about it (this or the whispers that Mike Mike Milken’s nephew will be taking a position as Bernanke’s administrative assistant)? Get in touch.
Update: Thanks to one of our more Google-savvy readers, we’re told the Haley in question is not the daughter of Ivan. Which is disappointing.
Update II: TALF, not TARP.
It’s Dutch auction time, for the multi-strategy fund. Letter to follow.
Bad Bank Program Probably Won’t Save RBS (Bloomberg)
RBS’s attempt to shed bad assets into a government insurance program, which is fundamentally the same thing as our Bad Bank program, probably won’t save them from nationalization. Because I’m an American, and therefore everything is about me, I have to wonder if our program’s structure is significantly different, or if our banks precarious situations are significantly different to warrant my belief that the same thing won’t happen to them. Aside, we should all stop being so serious for a minute and think about Vikram et al in kilts.
“”This is prolonging the inevitable and the inevitable is nationalization,” said Tom Kirchmaier, a corporate governance lecturer at the London School of Economics. “It will instill some trust, but I doubt it will solve all the problems with the banks. We still haven’t seen the worst of the real economy.”
Insider Trading Nets Broker Five Years (NYT)
“Mr. Tavdy and the former UBS AG executive, Mitchel S. Guttenberg, were among 13 people charged in 2007 in what authorities then called one of the most pervasive insider trading rings since the 1980s.
It included former employees of Wall Street businesses such as the Bank of America Corporation, Morgan Stanley and Bear Stearns. All 13 pleaded guilty.
In handing down the sentence, Judge Batts noted that from 2002 to 2006 Mr. Tavdy made “millions of dollars for himself and others by abusing insider information.” She added, “this is not a case of an isolated incident.”"
Merrill Surprises BAC With Debt, BAC Cries. (FT)
Relationships are hard. I mean Christ, I once bought a girlfriend a cake that said “Sorry I killed your dog” – I thought it was a perfectly reasonable joke, she didn’t (I hadn’t really killed her dog).
It looks like Merrill is getting hung out to dry here, which is a pathetic move; BAC should be castrated for letting this go down.
“The additional $500m in losses appear to have come from the discovery that Merrill used a flawed model for measuring the value of derivatives that were used in its hedging strategy.
Auditor Deloitte & Touche concluded that Merrill had “not maintained effective internal control over financial reporting” as of the end of 2008.”
Fidelity Chief Speaks Up (WSJ)
“In a rare public rebuke of the financial-services industry, Fidelity Investments Chairman Edward C. Johnson III called 2008 a “period laced with toxic investment waste and the casual use of other people’s money by a number of institutions.”
In a letter to shareholders issued Tuesday, Mr. Johnson blamed the economic climate on “well-intentioned policies…which made money ridiculously easy to obtain.”"
Apple Downgraded
“Before the market opened, Shebly of Calyon Securities lowered his rating on Apple’s stock to underperform, or sell, from outperform, or the equivalent of buy. Seyrafi sounded hesitant about Apple (AAPL 90.25, +3.30, +3.8%) in a research note, in which he cited several circumstances for his concerns about the challenges and issues facing the company.”
Those reasons include but are not limited to: Apple’s shit is expensive, and Jobs isn’t anywhere to be found.
AIG May Give Up On Plan To Sell Off (Reuters)
Here’s the plan: since we can’t find any buyers, we’ll just stop looking. Fuck everyone: let ‘em come for it.
“AIG is proposing additional ways to reduce the company’s debt to the U.S. government, including handing over stakes in some operations directly to the government, a person told the news agency.”
$$$ ‘Johns’ go to school, get charges dismissed [Charlotte Observer]
$$$ Latest calculator on nationalization [BV]
$$$ Grassroots: I am with Rick. [FW]
$$$ Checking in on Chuck Prince’s Golf Game [Cityfile]
$$$ Barney Frank Demands Immediate Repayment Of Northern Trust Boondoggle Money [zero hedge]
Things like “crucial details” are yet to be hammered about but NBD, this thing is as good as done, according to the Financial Times.
Citigroup and the US Treasury are nearing agreement on a deal that would give the federal government a stake of about 40 per cent in the troubled bank in exchange for bolstering its depleted capital base.
People close to the situation said no agreement had yet been reached and the government had yet to give its approval to the plan proposed by Citi, which stops short of outright nationalisation. But they added that negotiations between Citi’s executives and Treasury officials had made progress since the weekend and an announcement could come as early as Wednesday or Thursday.
