Guess What? It Turns Out That J.P. Morgan Chase Suspected Madoff Tomfoolery Ten Months Before The Ponzi Scheme Blew Up

February 3, 2011
JPMorgan Hid Doubts on Madoff, Documents Suggest

Senior executives at JPMorgan Chase expressed serious doubts about the legitimacy of Bernard L. Madoff’s investment business more than 18 months before his Ponzi schemecollapsed but continued to do business with him, according to internal bank documents made public in a lawsuit that was unsealed on Thursday.

On June 15, 2007, an obviously high-level risk management officer for Chase’s investment bank sent a lunchtime e-mail to colleagues to report that another bank executive “just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a ponzi scheme.”

Even before that, a top private banking executive had been consistently steering clients away from investments linked to Mr. Madoff because his “Oz-like signals” were “too difficult to ignore.” And the first Chase risk analyst to look at a Madoff feeder fund, in February 2006, reported to his superiors that its returns did not make sense because it did far better than the securities that were supposedly in its portfolio.

Despite those suspicions and many more, the bank allowed Mr. Madoff to move billions of dollars of investors’ cash in and out of his Chase bank accounts right up until the day of his arrest in December 2008 — although by then, the bank had withdrawn all but $35 million of the $276 million it had invested in Madoff-linked hedge funds , according to the litigation. [Read more…]

How Madoff’s Surviving Son Handles Grief and Scandal

By Stephen Foley in New York

Tuesday, 21 December 2010

THE INDEPENDENT UK


The fiancée of Bernard Madoff’s surviving son has provided a glimpse of life in the shadow of history’s biggest fraud, revealing how Andrew Madoff has thrown himself into music and new business ventures as a whirlwind of recrimination continues to swirl around him. [Read more…]

Bernie Madoff’s Guide to New York Restaurants

By Pete Wells

In an inspired piece of forensic accounting, Eater analyzes Bernie Madoff’s American Express statements to discover where the Ponzi schemer ate, what he spent, and how he tipped. His go-to restaurant for the period in 2008 covered by the statements was Lure. (But if he liked it so much, how come he only tipped six percent?) Lure was followed closely by Houston’s; perhaps Mr. Madoff found their spinach-artichoke dip irresistible. Or maybe it was just close to his office.

Government Report: TARP a Complete Clusterf*ck

McClatchy Washington Bureau

Wed, Apr. 01, 2009

Watchdogs: Treasury won’t disclose bank bailout details

Chris Adams | McClatchy Newspapersbush_ok_100

WASHINGTON — The massive programs designed to rescue the nation’s financial sector are operating without adequate oversight, with vague goals and limited disclosure of their details to the taxpayers who are paying for them, government watchdogs told a Senate panel Tuesday.

The Troubled Asset Relief Program, or TARP, was launched in the midst of last fall’s collapse of the nation’s banking system and is designed to get loans flowing to businesses and individuals.

But “without a clearer explanation” about parts of the program, “it is not possible to exercise meaningful oversight over Treasury’s actions,” said Elizabeth Warren, a Harvard Law School professor who leads a special congressional oversight panel monitoring the TARP program. Her comments came in a Senate Finance Committee hearing on the bailout program.

Noting that TARP passed Congress six months ago, Warren said that her group has repeatedly called on the Treasury Department to provide a clear strategy for the program — and that “the absence of such a vision hampers effective oversight.”

Although she has asked Treasury to explain its strategy, “Congress and the American public have no clear answer to that question.”

TARP is one of several programs the government has launched in recent months to help ailing institutions and even bolster healthy banks. Warren singled out one program, known as TALF, for appearing to involve “substantial downside risk and high costs for the American taxpayer” while offering big potential rewards for private interests. She said the public information about that program was “contradictory, promoting substantial confusion.”

The Government Accountability Office shared some of the same concerns, saying in a new report that “Treasury continues to struggle with developing an effective overall communication strategy” for the TARP program.

Beyond that, the GAO’s report pointed out the difficulty in even measuring whether TARP is working. As of March 27, the Treasury Department had handed out more than $300 billion of the $700 billion in approved TARP funds, the GAO said.

The majority of that money went to banks large and small around the country. And there are signs that credit is flowing from those banks; the GAO said that several hundred billion dollars in new loans were processed by the largest TARP recipients in December and January.

But crediting TARP for that is difficult, given the range of actions the government has taken since October. “Isolating the effect of TARP’s activities continues to be difficult,” the GAO’s Gene Dodaro said in his prepared testimony.

The Treasury Department, in a statement, said that “transparency and accountability are central to ensuring that taxpayer funds are spent wisely,” and noted that the department is actively working to respond to the recommendations of GAO and other oversight bodies. Among other things, the department has hired more staff and expanded its survey on bank lending activities.

Iowa Sen. Charles Grassley, the panel’s ranking Republican, described himself as “disappointed and frustrated” in the amount of information available about the program. “You can’t measure effectiveness when you don’t know what the goals and objectives of a program are, or how the program is being run,” he said.

Warren’s oversight panel made news earlier this year with its report that Treasury’s bailout programs had overpaid by an estimated $78 billion in its transactions with the nation’s ailing financial institutions. She said that issue is still under investigation.

Live Blogging the Madoff Hearing: The Victims Speak

Live Blogging the Madoff Hearing: The Victims Speak

Posted by Brian Baxter

AM LAW DAILY

The first Madoff victim–a Mr. Nuremberg–has approached the court to speak. He begins by challenging Madoff to look him in the eye. Madoff started to turn towards Nuremberg before Judge Chin ordered Nuremberg to return to the podium.

Nuremberg did as instructed and stated that a conspiracy count should be included in the plea. He said other individuals were undoubtedly involved in pulling together “the reams of data” that Madoff used to

build his fraudulent business.

Nuremberg urged Chin to reject the plea. Another victim has approached the podium and urged more of the same.

A third victim, who the audio dipped out on and we couldn’t get her name, says that Chin should push for a trial for Madoff that will show the true extent of his crimes and others allegedly involved

“We are a country that learns from our mistakes,” she said. “And then we can reexamine and improve the mechanisms that have failed us so completely here…with this horrendous crime. Mr. Madoff has

inflicted so much pain on the young, the old, and the infirm. No man is above the law.”

At this point, Chin says there will be no more statements from victims.

via Live Blogging the Madoff Hearing: The Victims Speak.

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