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MADOFF TRAIL LEADS TO WASHINGTON
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Bernard Madoff and Carlo Ponzi |
Pam Martens, who worked on Wall Street for 21 years, connects the dots on the Madoff scandal which continues to involve not only Wall Street but Washington lobbyists, payoffs, Congressman Ed Markey of Massachuetts and, of course, an oblivious SEC: Allen L Roland
Rivero's Rule is that all organizations and countries will eventually reflect the moral character and integrity of its leaders. The 50 Billion dollar plus Bernie Madoff Ponzi scheme is a perfect example of Rivero's rule in action ~ for the Bush/Cheney administration has been little less than an organized crime syndicate where money and power dwarfs all sense of moral integrity and character.
Marten's electrifying article in Counterpunch on December 22nd is must reading for all those who are concerned about the depth and scale of the Madoff scandal as well as the moral breakdown of not only Wall Street but our whole financial system.
Allen L Roland http://blogs.salon.com/0002255/2008/12/26.html
Lobbyists, Congress and the Ponzi Scheme / Madoff's Money Trail Leads to Washington
Pam Martens
COUNTERPUNCH
http://www.counterpunch.org/martens12222008.html
Excerpt: " I seldom have the urge to give a comforting pat on the back to people profiled in the Wall Street Journal. But that was my reaction when I read the 21-page whistleblower document about Madoff that was written by Harry Markopolos to the Securities and Exchange Commission (SEC) on November 7, 2005. The Journal still has the document on its web site and Markopolos provides a step by step plan for the SEC to follow to nail Madoff as a Ponzi fraudster. The letter followed a five-year effort by Markopolos, who supplied documentation and made repeated requests to the SEC to investigate Madoff.
Here’s how the SEC characterized the letter from Markopolos in a January 4, 2006 memo: “ The staff received a complaint alleging that Bernard L. Madoff Investment Securities LLC, a registered broker-dealer in New York (“BLM”), operates an undisclosed multi-billion dollar investment advisory business, and that BLM operates this business as a Ponzi scheme. The complaint did not contain specific facts about the alleged Ponzi scheme…”
Here’s a tiny sampling of what Markopolos told the SEC in his 21-page November 7, 2005 letter. You decide if these are “specific facts.”
“I am a derivatives expert and have traded or assisted in the trading of several billion $US in options strategies for hedge funds and institutional clients…(Highly Likely) Madoff Securities is the world’s largest Ponzi Scheme…The [Madoff] family runs what is effectively the world’s largest hedge fund with estimated assets under management of at least $20 billion to perhaps $50 billion…The third parties organize the hedge funds and obtain investors but 100% of the money raised is actually managed by Madoff Investment Securities, LLC in a purported hedge fund strategy. The investors that pony up the money don’t know that BM [Bernie Madoff] is managing their money…Some prominent US based hedge fund, fund of funds, that “invest” in BM in this manner include: A. Fairfield Sentry Limited (Arden Asset Management) which had $5.2 billion invested in BM as of May 2005…Access International Advisors…which had $450 million invested with BM as of mid-2002…Tremont Capital Management, Inc…Tremont oversees on an advisory and fully discretionary basis over $10.5 billion in assets. Clients include institutional investors, public and private pension plans, ERISA plans, university endowments, foundations, and financial institutions, as well as high net worth individuals…Madoff does not allow outside performance audits. One London based hedge fund, fund of funds, representing Arab money, asked to send in a team of Big 4 accountants to conduct a performance audit during their planned due diligence. They were told ‘No, only Madoff’s brother-in-law who owns his own accounting firm is allowed to audit performance’…Only Madoff family members are privy to the investment strategy. Name one other prominent multi-billion dollar hedge fund that doesn’t have outside, non-family professionals involved in the investment process. You can’t because there aren’t any…There are too many red flags to ignore. REFCO, Wood River, the Manhattan Fun, Princeton Economics, and other hedge fund blow ups all had a lot fewer red flags than Madoff and look what happened at those places…”
Here is what the SEC’s memo of November 21, 2007 said following its investigation:
“The staff found no evidence of fraud…All files have been prepared for closing…Termination letters have been sent to Bernard L. Madoff Investment Securities LLC, Bernard L. Madoff, and Fairfield Greenwich Group. The staff has no objection to the eventual destruction of the files and has no knowledge of any impediment to such a disposition.”
Let me run that by you again. Mr. Markopolos, a private citizen, uses his personal time and energy over a seven year period to document a fraud occurring under the nose of the SEC that could impact the international reputation of the United States along with the financial well being of pensioners, university endowments, foundations and private investors. After losing track of the case for five years, the SEC finally gets around to investigating using taxpayers’ monies. They come up with nothing despite being given a perfect path to follow to the fraud. And their final suggestion for dealing with the investigation is to destroy the files! With regulators like these, who needs Ponzi artists? "
As News Dissector Danny Schechter writes ~ " You could never make this up, even though Wall Street history is replete with earlier versions of this Sultan of Sleaze. Around the world, it is not just the supercrook Bernie Madoff who is seen as the guilty party, but the whole American system of free market finance. There will be a reckoning."
That day of reckoning is already here and an Obama administration must be aware that transparency and integrity must be their priority and charge ~ if the American financial system is ever to be fully trusted again.
Allen L Roland http://blogs.salon.com/0002255/2008/12/26.html
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