Product Liability Attorney Blog

A villa in France, a penthouse apartment in New York, a home in Palm Beach – these are just a few of the items the federal government is seeking in a forfeiture proceeding against Bernard Madoff, the Wall Street Journal reports.

But don’t expect Madoff to give up the assets – which also include boats, cars, $17 million in cash and $45 million in bonds – without a fight. Many of the assets are titled in the name of Madoff’s wife, Ruth, and lawyers for the Madoffs are expected to argue that she is independently wealthy.

As Bernard Madoff, the mastermind behind a multibillion Ponzi scheme, fights to preserve his family fortune, many of his investors are still trying to come to terms with the fact that they’ve lost everything as a result of Madoff’s fraud.

Continue reading "Madoff’s Millions" »

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Last week’s finding that Bernard Madoff didn’t trade any securities for more than ten years lends support to the claims that he could not have carried out the largest Ponzi scheme in history all alone, Bloomberg News reports.

Late last year, Madoff told federal investigators that he was solely responsible for the $50 billion securities fraud scam. But that seems unlikely. According to the bankruptcy trustee liquidating Madoff’s securities firm, it now appears there were no trades for at least a decade. At the same time, the firm sent client statements showing trading activity and market prices.

In an interview with Bloomberg, Columbia University Law School professor John Coffee noted:

“Someone had to creatively imagine what to tell all those clients.”

In addition to employees of the securities firm, Coffee indicated that feeder fund managers may also find them exposed to criminal charges.

“If prosecutors can show a kickback or any kind of undisclosed payments to feeder funds, then it will be much simpler for private investors to sue those feeder funds and it can support indictment under mail and wire fraud statutes.”

Continue reading "Madoff Must Have Had Help" »

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Victims who had hoped to recoup $50 billion worth of losses from the sale of Bernard Madoff’s brokerage will likely be disappointed by a report that estimates the brokerage will fetch no more than $10 million.

According to Bloomberg News, a profit report prepared by investment bank Lazard Ltd. concluded that the brokerage earned only $1.12 million last year. In addition, the brand is now tarnished because of the alleged Ponzi scheme that cost investors billions of dollars.

Recently, The Wall Street Journal compiled an extensive list of Madoff’s most over-exposed investors. In addition to those mentioned in our previous posting, some of the charities, hedge funds and banks that could sustain staggering losses include:

The British bank Royal Bank of Scotland Group PLC which had a potential exposure of almost $500 million as a result of trading through Madoff and collateralized lending to funds of hedge funds.

BNB Paribas, a French bank, could lose up approximately $430 million through its trading business and collateralized lending to funds of hedge funds.

Spanish bank BBVA could lose almost $370 million if Madoff funds were not found to exist.

Man Group PLC, a U.K. hedge fund, estimates it could lose $360 million as a result of investing directly in Madoff funds and indirectly sub-advised by Madoff Securities and for which Madoff acts as a broker-dealer.

Continue reading "Sale of Madoff Brokerage Won't Reimburse Investors" »

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Spain’s anticorruption prosecutor is investigating how that country’s largest lender, Banco Santander, lost money through Bernard Madoff’s alleged fraud.

Santander, which is also the owner of U.S.-based Sovereign Bancorp, could lose $3.1 billion as a result of the alleged Ponzi scheme.

According to the Wall Street Journal, the probe was launched last month. Investigators are examining the relationship between Santander, the investment fund Fairfield Greenwich Group, and Madoff.

As the WSJ reported last week, Fairfield Greenwich could lose $7.5 billion in Madoff fund investments. Other charities, hedge funds and banks that invested money with Madoff and now face potential losses include:

HSBC, a British bank, provided financing to a small number of institutional clients who invested with Madoff. HSBC’s potential loss exposure is $1 billion.

French investment bank Natixis SA indicated that while it did not directly invest with Madoff funds, some investments made on behalf of its customers could have ultimately wound up with Madoff. Natixis could lose $554 million.

Carl Shapiro, an entrepreneur and investor, personally lost approximately $400 million in the alleged fraud. His charitable foundation, Carl and Ruth Shapiro Family Foundation, lost an estimated $100 million.

Continue reading "Spanish Prosecutor Probes Investor Fraud" »

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A federal judge is expected to announce at noon today whether he will revoke Bernard Madoff’s bail, Bloomberg News reports. While Madoff, the alleged perpetrator of a $50 billion fraud, wonders whether he’ll go to jail, his investors wonder whether they’ll recoup any of their money.

Last week, The Wall Street Journalcompiled an extensive list of Madoff’s most over-exposed investors. In addition to those mentioned in our previous posting, some of the charities, hedge funds and banks that could sustain staggering losses include:

Banco Santander, a Spanish bank, could face up to $2.9 billion or 2.33 billion euros in losses. Of that amount, 2.01 billion euros belongs to institutional investors and 320 million belongs to private investors.

The Austrian bank, Bank Medici, had two funds with $2.1 billion invested with Madoff’s firms. The bank’s hedge funds reportedly had almost all of their money invested with Madoff.

Access International Advisors possible exposure amounts to $1.5 billion. The firm’s co-founder Thierry Magon de La Villehuchet was found dead of an apparent suicide last month. He lost about $50 million in the alleged Ponzi scheme.

Union Bancaire Privee, a Swiss bank, had approximately $700 million in investments related to Madoff including one run by J. Ezra Merkin.

Continue reading "Potential Losses Mount for Madoff’s Most Exposed Investors" »

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The Wall Street Journal has compiled a comprehensive list of investors that plowed money into Bernard Madoff’s $50 billion alleged fraud scheme.

Over 100 investment companies, hedge funds, banks, charities and individuals are identified as well as the exposure each investor is facing. Some of the companies that invested their clients’ money with Madoff now stand to lose a great deal.

More than half of Fairfield Greenwich Advisors $14.1 billion in assets was connected to Madoff. That means it could face a loss of $7.5 billion.

Tremont Group Holdings, an investment firm owned by OppenheimerFunds and Massachusetts Mutual Life Insurance Co. could face a loss of$3.3 billion.

The hedge fund Ascot Partners invested substantially all of its assets with Madoff and could lose $1.8 billion.

Asset manager Bramdean Alternatives faces $31.2 million in loss exposure.

The pain isn’t just contained to the United States. The global list includes Swiss, French, Japanese, Dutch, Italian, Israeli, Belgian, Portugese, and Singapore-based companies.

Continue reading "Madoff’s Investor List" »

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Bernard Madoff allegedly bilked investors out of $50 billion and it appears there will not be enough assets left in the investment firm to reimburse investors who were victimized by the giant Ponzi scheme.

However, Madoff’s indirect investors, people who invested with a broker or hedge fund that then turned the money over to Madoff, may have a good shot at a winning at least a partial refund.

Brokers and hedge funds must conduct a due diligence investigation before turning a client’s money over to another investment firm. In the Madoff debacle, middlemen that acted as a go-between are now facing lawsuits from angry investors claiming a lack of due diligence, Fortune magazine reports.

The suits allege that Madoff’s middlemen such as Ascot Partners of New York City ignored red flags even as other funds avoided Madoff’s investments because of the presence of obvious danger signs.

Continue reading "“Made Off” with the Money" »

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Investors who trusted prominent Wall Street trader Bernard Madoff with their hard-earned savings are reeling from the news that he allegedly bilked them out of $50 billion through a fraudulent Ponzi scheme.

Madoff’s victims include not only banks and hedge funds but also individuals and a variety of charitable foundations such as one founded by Holocaust survivor Elie Wiesel and another started by famed Hollywood director Stephen Spielberg, Bloomberg News reports.

Madoff, the former chairman of the Nasdaq Stock Market, was arrested last week by agents with the U.S. Federal Bureau of Investigation and charged by federal prosecutors with one count of fraud. The Securities and Exchange Commission filed separate civil charges against 70-year-old Madoff.

This week, a federal judge ordered the U.S. operation of Bernard L. Madoff Investment Securities LLC to be liquidated. A court-appointed trustee will seize any remaining assets and attempt to return it to investors.

But it is already clear that there won’t be nearly enough to reimburse investors. As a result, many are facing crippling losses.

Continue reading "Madoff Victims Reeling after Financial Fraud is Disclosed" »

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