Christmas came early this year for the true anti-Semite

[newworker]

The anti-Semite's new Santa is Bernard Madoff. The answer to every Jew-hater's wish list. The Aryan Nation at its most delusional couldn't have come up with anything to rival this:

The former chairman of Nasdaq turns out, also, to be treasurer of the board of trustees at Yeshiva University and chairman of the university's business school. Rich beyond human comprehension, he handles fortunes for others, buying and selling in a trading empire that skirts investment banks and other possible sources of regulation. He redefines avarice, knowingly and personally bilking charities and retirees in the most classic of con games.
Advertisement

Even better, for those obsessed with the idea that Jews control finance, entertainment and the media, is the idea that Madoff's greed was uncontrollable enough that he targeted fellow Jews, even Holocaust survivors, some of them his own friends, as well as Israeli companies who insured Jews, including Holocaust survivors.

The beauty part, for the anti-Semite: Madoff's machinations, which could have been put to use for the sake of humanity [?!?], have directly harmed Jewish welfare and charity institutions.

He has managed to harm contemporary Jewry in ways anti-Semites could only dream about. He has sapped the Jewish Federation of Greater Los Angeles of 11 percent of its endowment, or more than $6 million. In the words of prominent educator Avraham Infeld, he "obliterated" long-standing charitable foundations for Jewish causes in Israel, Eastern Europe and North America.

Along the way, Madoff assured the story enormous play, not only with the scale and the impudence of the scheme, but with his A+ roster of celebrity victims, among them Stephen Spielberg, Elie Wiesel, and billionaire real-estate tycoon, media mogul, commentator and former chairman of the Conference of Presidents of Major American Jewish Organizations Mort Zuckerman. A senior U.S. senator is one of his client-marks, as well as present and past owners of professional football and baseball teams.

Then there was the betrayal of old friends like philanthropists Carl and Ruth Shapiro, megadonors to the Museum of Fine Arts in Boston, Brandeis University and the Beth Israel Deaconess Medical Center.

"The scandal rippled far beyond the multimillion-dollar private foundation run by Madoff that channeled money into hospitals and theaters," Reuters reported, "and swept up charities large and small, directly and indirectly, along with wealthy Jewish investors Madoff personally advised."

Adding the element of clannishness, The New York Post was more direct.

"Working the so-called "Jewish circuit" of well-heeled Jews he met at country clubs on Long Island and in Palm Beach, and through his position on the boards of directors of several prominent Jewish institutions, he was entrusted with entire family fortunes.

"The guy was totally respected. He was a heymishe Jewish guy. He had sweet old ladies and he let their children in," said a Manhattan lawyer who invested with Madoff.

"This guy was dealing with all the rich Jews in Roslyn and the rich Jews in Palm Beach. This was passed down from family member to family member because he wouldn't open up to new people."

It remains to be seen how far we've come from the days of the frank Jew-hate and genteel anti-Semitism of the likes of Henry Ford and friend. Scott Fitzgerald. We can only hope that the Meyer Wolfsheim Effect remains dormant, the Great Gatsby heritage of "the man who fixed the 1919 World Series."

" ... If I had thought of it at all, I would have thought of it as a thing that merely happened, the end of some inevitable chain," Fitzgerald's narrator confides. "It never occurred to me that one man could start to play with the faith of fifty million people - with the single-mindedness of a burglar blowing a safe."

In the meanwhile, Bernard Madoff, you've made the days of uncounted devout Jew-haters. This year, all they want for Christmas, is you.

 

[newworker]

Madoff investors may have to give back any profits made

Investors May Have to Surrender Gains

Investors are unlikely to get back much of the money they invested with Bernard Madoff, and those who took out money in recent years may have to give it back.

It is a complicated situation. And certain investors may be able to offset some of their losses through tax moves and through the organization that steps in when brokerage firms fail.

As investigators figure out how the money disappeared, the ramifications for investors are large. If the money were stolen from a brokerage, as much as $500,000 per client should be covered by the Securities Investor Protection Corp., a nonprofit funded by the securities industry. However, SIPC doesn't cover investment losses, and many of Bernard L. Madoff Investment Securities LLC's clients had millions of dollars invested with the firm, far above the SIPC limit.

The alleged deception by Mr. Madoff far exceeds the scale of past hedge-fund frauds, including the high-profile, $400 million scheme by Connecticut hedge-fund company Bayou Group LLC. Bayou's co-founder Samuel Israel III went on the lam on the day he was to report to prison for a 20-year sentence earlier this year.

Though dramatically smaller in scale, Bayou is being discussed in connection to the Madoff scandal. That is because the federal bankruptcy court overseeing the Bayou case decided this year that investors who had pulled their money out of Bayou in some cases years before Bayou's fraud was detected had to reach into their pockets to give back profits, and even some of their initial investments, to help offset losses by other investors who got snared in the scheme.

That decision was based on a legal notion called fraudulent conveyance, which concerns the illegal transfer of property with the intent to commit fraud. The concept could be mixed news for Madoff's investors, depending on their situation.

"I'm sure there are some people who are thinking their lives are over, but the good news is that because Madoff is thought to have run a Ponzi scheme, investors could get money back from other Madoff investors who already took money out," said Brad Alford, who runs Atlanta-based investment adviser Alpha Capital Management LLC.

The Bayou precedent, and the fact that hedge funds are involved, is just part of the reason that investors who thought they made money with Mr. Madoff in the past could find themselves on the hook to return money. Bankruptcy-receivership practices make all investors vulnerable.

"The concepts blur in a Ponzi scheme where one person's principal is another person's profits," said Jay Gould, a former SEC investment-management attorney who now runs the hedge-fund practice at Pillsbury Winthrop Shaw and Pittman LLP in San Francisco. "It's the receiver's job to go back and collect as many assets as possible, from whatever sources, including investors who withdrew assets from the scheme -- whether those assets were characterized as principal or profit."

Still, it is doubtful, given the alleged scope and structure of Mr. Madoff's scheme, that investors who feel they have lost everything will find much relief. "They probably won't see much of that money ever again," Mr. Gould said.

One Bayou investor Mr. Alford knows got out of Bayou almost two years before that firm filed for bankruptcy. Given how much time had passed, the investor was stunned to learn that he had to return part of his original Bayou investment as well as all of the profits he thought he had made -- profits that ended up being fabricated -- Mr. Alford said.

If the same holds true with Mr. Madoff's case, people who pulled money to pay for home mortgages, retirements or children's college bills could end up trapped.

 

[Jones]

Madoff Suspicions Are Only in Hindsight
By Jane Bryant Quinn
Sunday, December 21, 2008; F03

Why do people wind up with the Bernie Madoffs of this world? Because they've neglected one of Ronald Reagan's favorite sayings, "Trust, but verify."
When it comes to Wall Street, I'm not even sure about the "trust" part, but "verify" is where wisdom begins.
Admittedly, Bernard L. Madoff was a hard guy to be suspicious of. Former chairman of Nasdaq, pioneer in electronic trading, a reputation as a trading wizard -- why would you say anything but thanks when he took you as a client? Then he took your money, too, according to civil and criminal charges filed last week. He stands accused of running a long-standing Ponzi scheme, with losses to investors of at least $24 billion and perhaps as much as $50 billion.
Madoff played to two of our most serious weaknesses as investors and human beings.
As investors, we love to believe in market wizards who hold the secret to making serious money. In fact, there's no such secret, but admitting it is like abandoning a childhood faith. Faith propels the money-management business, despite the evidence that managers rarely beat the market indexes, over time. We especially love a fatherly wizard who's close to his children, plays golf, supports caring charities and lays expensive carpets on his office floor.
As human beings, we love status symbols and, to those who knew him, Madoff was status on wheels. Investing with him proved your wealth, position and general superiority to the poor slobs bobbing around on the fringe. His investors believed they were earning steady monthly increases of 1 percent or 2 percent, even when markets went bad. Who would dream of vetting such a prize?
Even if you tried, it might seem that Madoff would have been impossible to catch. But at least two warning signals flashed for anyone to see.
First, Madoff's accounting firm, Friehling & Horowitz in New City, N.Y., was a rinky-dink shop, as a simple Google search shows. The firm doesn't have a Web page. I found it on a junky site that lists local businesses by type and address, along with the boilerplate comment, "rated as good by a New City citizen." That's an unlikely auditor for the $17 billion that Madoff claimed to have under management. When the fraud came to light, friend&H turned out to be a tiny office which, neighbors said, wasn't even open all the time. (The office didn't answer its phone.)
Second, Madoff held your securities (or what he claimed were your securities) in his own advisory firm. That's not the way reliable advisers handle publicly traded investments. The custodian should always be a large, independent financial institution that reports cash flows and trading activity to you directly. When you invest new money, you should make out the check to that account.
Even if your mother is your investment adviser, look to the quality of the oversight. You want a major accounting firm checking the books and a brand-name custodian tracking the trades and the amount of money in your account. If that's not happening, something's wrong.
Many questions have yet to be answered about Madoff's operation.
He ran his investment advisory firm separately from the brokerage house and, according to court documents, kept the records under lock and key. The advisory firm had 20 employees -- what were they doing while the money gushed through?
Where was the Securities and Exchange Commission? It has been hearing from whistleblowers since 1999, one of whom directly accused Madoff of running a Ponzi scheme. No one was able to replicate his amazing results with the strategies he said he was using. An SEC investigation as recently as 2007 was closed without bringing charges. It's a startling failure of enforcement. The congressional oversight committees need to find out what went on.
Madoff's big-league advisory money came through three feeder firms that operated funds of hedge funds and vetted managers for clients. One of them, Fairfield Greenwich Group, brags on its Web site that it offers "superior hedge funds" and "selectively identified external managers." How much did these feeder firms earn from Madoff's business? How come they didn't hire someone to trot down to New City to see who was auditing the books? Fairfield said it was "shocked and appalled by the news." I'll bet.
When the story broke, a number of hedge-fund advisers came forward to say that they had looked at Madoff's operation and warned people off. His steady-eddie returns were just as suspicious as his choice of accountants. The advisers who fell for him have a lot to answer for.
Madoff's probably won't be the last fraud to surface, as Wall Street's tide goes out. If your money is under management, you might Google its accounting firm and custodian, just in case. Move your account if anything looks wrong. The cash can sit in a money market fund while you regroup.
Also, give your ego a reality check. There's nothing more gratifying than being asked to play with the big boys, but they can lose a few million and go on. Maybe you can't. At that so-called "sophisticated" level, you get far less protection than the average Joe the Investor gets in a mutual fund.
I once asked one of America's super-rich women what the hardest thing was about managing wealth. "Avoiding fraud," she said. It never arrives in the obvious form of a carnie barker. It's always someone like, well, Bernie Madoff, solid, smiling, generous, and with an arctic heart.
Jane Bryant Quinn, author of "Smart and Simple Financial Strategies for Busy People," is a Bloomberg News columnist. Alexis Leondis contributed to this column.

 

[newworker]

Interesting angle.........

Quote:
....Rather than saying this hedge fund has gone bust, due to its choice of investment assets and investment methologies, a scenario which is highly probable in the current financial paradigm, since all the professionals are predicting that at least 30% of all hedge funds are about to fail, more than 700 of them, the CEO chooses to fess up to fraud. If the CEO admits the fund has gone bust, then all those wealthy members of the Jewish community get nothing, but if the CEO admits to fraud they get their money back as compensation from the US tax payer....