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Former Madoff Employees Will Get Their Money Or Faces Will Be Smashed

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The Daily Newsreports that former Madoff traders Reed Abdend and Richard Stahl have filed separate suits requesting $473,940 and $1.34 million in deferred compensation, respectively, from Bernie's boys Mark and Andy (pictured at left on one of their many fishing trips). For those of you thinking the Stahl character sounds familiar but can't quite place him, we're told that "Richard," now working at First New York Securities, was previously known on Bloomberg as "Rick," but wisely changed his name after the whole Ponzi thing. He also played football for Holy Cross as a tackle and is described as "a real hot head who always tried to physically intimidate people in the work place." Up until recently (let's peg it as December 2008) he apparently "kissed Mark and Andy's asses." Now, not so much!
Abdend, you'll recall, is the guy who got into a slapfest with Andy and his girlfriend Catherine outside a Chinese restaurant. If anyone here is looking to to hire a new employee who'll inject a little infamy-by-association into the shop, here's the cover letter Reed was circulating earlier this year (not sure if he's since landed a job, so act fast).

To Whom It May Concern:
I would like to take this opportunity to set the record straight regarding my position at Bernard L. Madoff Investment Securities. I am sure that you are aware that the firm no longer exists due to the fraudulent activities of the owner in a separate part of the business. My position in the firm was in the proprietary division on the 19th floor, which was separate in records, location, personal, and management. The employees in the market making and proprietary units are victims of this fraud.

From May of 2000 to October of 2006, I was an equity market maker who concurrently traded proprietarily in the firm's market making unit. When I was hired in May of 2000, the firm employed over 40 traders in the market making division. During my six years on this desk, Bernard L. Madoff eliminated virtually all of the traders from their market making business in an effort to become fully automated. By October of 2006, there were eight remaining market makers at the firm. At that time, I was one of three market makers that were offered the opportunity to manage a $25M long / short equity, options, and futures portfolio in the proprietary division.
My experience as a market maker was valuable because it taught me to drastically reduce my transaction costs with respect to stock specific liquidity and it also aided me in attaining a certain respect for the market and its complexities. As a portfolio manager, I vastly increased my understanding of risk management / hedging and I was successfully able to remain profitable in a multitude of volatile environments. In 2008 I was +8.4% on allocated capital, and +66% on utilized capital. I only hope that you can judge me based on my accomplishments and not on my association with my previous place of employment. I would sincerely appreciate the opportunity to speak with you in the near future.
Reed Abend


Former Madoff Employee Pleads Guilty To *A* Madoff Securities Scam Just Not *The* Madoff Securities Scam

You know what has got to suck? When you decide to start charging stuff that doesn't fall under "business expenses" to your corporate card and engage in a few other amateur hours scams that probably wouldn't have been found out (or, if discovered, not taken to the authorities because your boss had high tolerance for fraud) but then they are because the CEO of your firm had to go and engage in the largest Ponzi scheme on record, which shone an uncomfortable light on company personnel and all of the cheese, popcorn, and salsa of the month clubs you joined (for example).  Craig Kugel knows what we're talking about. The son of a longtime trader for convicted Ponzi scheme operator Bernard Madoff pleaded guilty to conspiracy and other criminal charges Tuesday, but denied any involvement in the decades-long fraud. Craig Kugel, the son of David L. Kugel, a former supervisory trader in Madoff's proprietary-trading operation, admitted to filing false forms that claimed people were on the Madoff payroll when they didn't actually work for the firm and to not declaring as income personal expenses charged to the firm's corporate credit card. Those individuals were paid salary and benefits, but weren't actual employees, he said. "I am sorry for my lapses in judgment in committing these federal crimes, but I want to make clear I had nothing to do with the Madoff Ponzi scheme and I was never involved in the Madoff trading operation," Craig Kugel said at a hearing before U.S. District Judge Laura Taylor Swain in Manhattan. Ex-Madoff Employee Pleads Guilty to Conspiracy [WSJ]