It’s not that we don’t like J. Erza Merkin, but one wondered why, given appearances, he remained “in charge” thus far. Alas, no more.
Financier and money manager J. Ezra Merkin agreed to New York Attorney General Andrew Cuomo’s demands to step down as manager of his hedge funds and place them into receivership, according to a person familiar with the matter.
Mr. Merkin, who funneled $2.4 billion from universities and nonprofit organizations into Bernard Madoff’s firm, was charged last month on allegations he “betrayed hundreds of investors” by repeatedly lying to them about how he invested their money.
There is little doubt that the Madoff affair drew the waters back to a great extent and, to borrow a turn of phrase, exposed a number of skinny dippers in the water of finance. In this connection it is no accident that New York State is struggling with its own “promoters scandal” and film distribution underwriting embarrassment at present. We suspect, given this, that Merkin is but the tip of the iceberg. More fun and games to come, no doubt. Probably less amusing names though.
Cuomo Removes Merkin as Manager of Funds [The Wall Street Journal]
(We were very tempted to shorten this to “Cuomo Removes Merkin,” but we decided that would be a bit much).
Despair not, Friends of Bernie. Checks are headed your way. At least, that’s the rumor. Yes, true, they might not be quite as large as you were expecting, or hoping, or wishing for, but a check is a check- but we post our checks from the phone company for lost quarters as soon as possible, so maybe our perspective isn’t perfect.
If you are still waiting, hang in there. The check’s in the mail.
Checks for about $30 million have been mailed out so far to individual victims of Bernard L. Madoff’s multibillion-dollar Ponzi scheme, according to the court-appointed trustee handling the case.
Those checks are part of $61.4 million already approved for payment by the Securities Investors Protection Corporation, the federally chartered agency which oversees the liquidation of brokerage firms. The total of approved claims is expected to reach $100 million by Memorial Day, the trustee said.
So far, the 125 claims that have been approved for payment add up to losses of $368 million, said Irving H. Picard, the trustee, in a news conference on Thursday.
Of the checks mailed so far, almost all were for $500,000, the maximum protection provided under the S.I.P.C. law.
$30 Million Paid to Madoff Victims [The New York Times]
You have by now, no doubt, seen the Daily Beast’s take on Madoff: The Movie. Frankly, we think their casing is all wrong. Madoff seems much more Seinfeld’s Jason Alexander to us (though we love Sam Waterston as Noel). But we don’t want to impose our jaded views on you when it comes to Bernie entertainment. We are certain you can cast this thing better than The Beast or Dealbreaker. Have at it!
Madoff The Movie [The Daily Beast]
This country loves the smoking memo. Loves the mere scent of the ignored warning to disaster. Loves the sting of accusation when it attaches to the retrospectively blind actor who missed the whispers from the tea leaves. Loves Markopolis. Loves seeing the SEC on the hot seat for missing the obvious. For ignoring the… the “smoking memo.” Loves the ignored FBI memo warning, vaguely, on the looming dangers to the United States. No surprise then that revelations that Jack Nash warned J. Erza Merkin “numerous times over the years” that something was amiss in Chateau Madoff would produce Dealbook entries on same:
Mr. Nash, the former chairman of the investment giant Oppenheimer & Company and a pioneer of the modern hedge fund industry, had briefly invested with Mr. Madoff in the early 1990s, but pulled his cash out after a closer look raised red flags about the man who last month admitted to running an enormous Ponzi scheme.
According to the civil lawsuit against Mr. Merkin filed Monday by New York Attorney General Andrew M. Cuomo, Mr. Nash told Mr. Merkin numerous times over the years that he was suspicious of the steady profits Mr. Madoff posted.
We wonder, some, where the story is. “Numerous” warnings over the years that someone is “suspicious of the steady profits,” is hardly a smoking memo. But then, perhaps we haven’t seen all the memos?
Merkin Was Warned by a Wall Street Legend [DealBook]
Bankruptcy is nothing compared to the power of forfeiture vested in the Department of Justice. So why bother letting the assets slip into the expensive, time-consuming morass of bankruptcy? Let’s just take them all, no?
The Securities and Exchange Commission asked a federal judge on Wednesday to block an effort by a group of customers to force convicted Ponzi-scheme operator Bernard Madoff into involuntary bankruptcy.
In a court document filed Wednesday, the securities regulator asked U.S. District Judge Louis Stanton in Manhattan to reject a motion to lift a stay in the SEC case against Mr. Madoff that prevents the former clients of Bernard L. Madoff Investment Securities LLC from pursing a bankruptcy action against him personally.
SEC Seeks to Block Bid to Force Madoff Bankruptcy [The Wall Street Journal]
Forcing the accused into personal liquidation is a long honored tradition that used to be the first thing resorted to, even before the trappings of criminal procedure. What the hell happened here? Perhaps victims (and the rest of us) were too stunned to think of it before now?
A lawyer for victims of Bernard Madoff’s $65 billion Ponzi scheme is seeking to force the fraudster into personal bankruptcy to ensure that all his assets are used to pay those from he stole.
“It’s an important step to ensure that all Madoff assets are brought before the bankruptcy court to be used for victims of this massive fraud,” Jonathan Landers, a lawyer with Milberg LLP, which represents more than 70 victims, said in a phone interview.
Whatever the case it seems somewhat difficult to imagine that the recovery levels will be high. We suppose you never know, but we sort of doubt the Bernster left all that much behind.
So much for the multi-0 balance at the correctional commissary, Berno.
Madoff’s Victims Seek to Force Him Into Bankruptcy [Bloomberg]
I thought you meant something else by “all assets.”
A lawyer for the court-appointed trustee liquidating Bernard Madoff’s firm confirmed Monday they’ve located another $75 million in Madoff assets – a figure that would put the total above $1 billion.
A lawyer for the court-appointed trustee also said Monday that French authorities are moving to seize Mr. Madoff’s residence in France, to satisfy claims by Madoff’s victims in France.
Trustee Finds More Madoff Assets [The Wall Street Journal]
David Friehling skated after coughing up a $2.5 million bail. No word yet if the check bounced.
Bernard Madoff’s longtime accountant has been released on $2.5 million in bail.
The 49-year-old David Friehling was arrested on fraud charges Wednesday and accused of helping the disgraced money manager cheat thousands of investors out of billions of dollars.
The accountant was released after a brief hearing Wednesday in federal court in Manhattan.
Madoff’s accountant released on $2.5m bail [The Associated Press]
WSJ: Prosecutors have charged Bernard Madoff’s longtime accountant with securities fraud, the AP reports.
David Friehling (pictured center) surrendered to authorities, and will be facing the music presently, it seems.
$823 million.
Actually, between $823 million and $826 million. That is what the Jewish T-Bill managed to come out on the other side of $65 billion (or so) with. At least, “according to court papers filed on Friday.” $700 million of that is tied to Big B’s ownership in Bernard L. Madoff Investment Securities LLC.
Madoff to appeal bail, net worth revealed [Reuters]
We wouldn’t go so far as to say that Bernie Madoff is headed off for Federal Pound Me In The Ass Prison, but it promises to be a decidedly unpleasant facility. Still, apparently one adjusts to the new decor after being disabused of the Hollywood prison projection. (Be that good or ill).
Bales, of Federal Prison Consultants, said his newly convicted clients typically expect the worst, their nightmares of prison rape fueled by television shows like “Oz” and movies like “The Shawshank Redemption.” But once they end up behind bars, some inmates are pleasantly surprised to find that it’s not as dangerous as they’d thought, he said.
Madoff, should he plead guilty as expected, will certainly want to select his facility of choice. (Sorry Bernie, Camp Cupcake of Martha Stewart fame is not an option). But, since our readers know more about anything than anyone, we thought we’d do a little survey.
Do you think Madoff will get his first pick?
According to Bales, that’s likely to be the facility in Fairton, N.J. “It’s one of the best places to do your time,” said Bales. “They send a lot of senators there and attorneys.”
We can keep track of ole Bernie with the Fairton News Wire blog, (ok, actually its just an automated feed blog, but that would have been rich!) and he will get to enjoy the culinary delights of the prison commissary:
In 1930 the Department of Justice authorized and established a Commissary at each Federal institution. The Commissary was created to provide a bank type account for inmate monies and for the procurement of articles not regularly issued as part of the institution administration. The purpose of individual inmate Commissary accounts is to allow the Bureau of Prisons to maintain inmates’ monies while they are incarcerated. Family, friends, or other sources may deposit funds into these accounts.
Actually, it might be a little dangerous to let Bernie have a bank account, no?
No Club Fed for Madoff [CNNMoney]
