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Whistleblower On Madoff Rocks Mainstream Media

March 4, 2010 (By Bud Burrell)

Harry Markopolos’ Book: “No One Would Listen”

– From “Front and Center”, by C. Austin Burrell –

This week, Certified Fraud Examiner Harry Markopolos announced the release of his new book, “No One Would Listen”, about the complete stonewall he hit with US Government Regulators including the SEC and FINRA. He told his story in his typical low key and very professional manner, making his message all the more devastating.

I am sure that SEC, FINRA and other officials to whom he reported his findings on the scope of the Madoff fraud felt footfalls on their graves.

Starting with CNBC, and then going to Matt Lauer, CNN and FOX News, he recounted his story of his discovery of the Madoff fraud, which had been ongoing for many years, when he examined the claimed performance of Madoff’s split strike price conversion strategy, and his quick realization that he claimed performance that would have simply been impossible to produce. He recited the sequence of events that led him to conclude within 30 minutes that Madoff was a fraud. It is where it went from there that no one except people who had faced similar risks could imagine. [entire post]

Tags: book, conversions, finra, harry markopolos, lawyer misconduct, madoff, no one would listen, reverse conversions, sec, short selling, split strike price, threats
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SEC, FINRA, Madoff, Stanford: Painful & Offensive Evid

October 15, 2009 (By Bud Burrell)

From “Front and Center”, by Bud Burrell

– This week, an 80 page internal report of the behavior of Dallas and New York FINRA staff members in actively protecting and shielding Sir Allen Stanford and his billion dollar Ponzi scheme was leaked by unidentified sources. This sickening report drove home the total absence of internal controls at FINRA related to discovering and acting on massive frauds for which they were given nearly untold numbers of signals that should have prompted their action against such parties. Near the end of the report, it was stated that the behavior of FINRA was essentially identical with regard to Bernie Madoff’s Registered Investment Advisor and his related broker-dealer.

Some years ago, I had the chance to see a brilliant and upcoming 18 year old comedian at “Catch a Rising Star”. He wrecked the audience with the description of his multi-ethnic background, saying his mother and father, who were from different ethnic groups, had met each other on the subway picking each others’ pockets.

After hearing the full stories of the way in which Madoff and Stanford each manipulated the SEC and FINRA to a point of abuse, I was reminded of this routine. The only difference was that in this case we had two RICO criminal enterprises manipulating two other Government and quasi-governmental institutional criminal enterprises, working together to pick the pockets of major investors, domestically and internationally. [entire post]

Tags: atm, cojones, einstein, finra, fraud, impeachment, madoff, petitions, picking pockets, recalls, sec, stanford, stupidity
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A Sea Change In Short Selling Regulation

August 10, 2009 (By Peter Chepucavage)

From “Plexus Nexus”, by Peter Chepucavage

We have noticed with frustration the Commission’s recent actions’ confirmation of a change from pre-trade regulation to post trade regulation of abusive short selling. It’s an affirmation of the wisdom of unsafe sex if it can be fixed later. The essence of our argument is found in a recent courageous Dow Jones article by Joe Checkler (http://compliancex.typepad.com/compliancex/2009/08/even-with-new-rules-naked-short-violations-hard-to-enforce.html). These arguments were also reinforced by CEO Neiderhauer of the NYSE who recently stated:

“But even if we get that done, your second part of your question is the important part. What was really broken in this country was not the trading rules. It was the borrowing, lending and delivery rules. They were not being enforced. People were not borrowing stock and had no intention of borrowing stock when they shorted. And that was our big issue with the SEC in the previous administration. Enforce the rules.

“Settlement’s supposed to be T-plus-three in this country, not T-plus-100. And there were a lot more aged fails than people thought. So I think tightening up those rules has made a big difference and has dramatically reduced the amount of naked short selling. [entire post]

Tags: liquidity, madoff, neiderhauer, ponzi, reg sho, short selling
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Madoff Case More Important Than Warranted: Redux From 12/20/08

June 22, 2009 (By Bud Burrell)

From “Front & Center”, by Bud Burrell

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(Note: I have reposted this as of yesterday’s increase in the amount lost estimate to $65 Billion. I predicted this over six months ago in this blog comment to my Blog at www.thesanitycheck.com. I think it will go higher yet.)

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The Madoff case may become more important than warranted by a simple examination of its relatively secondary size to the major fraud scandals already threatening our economy and political system.

It should be obvious to all experienced people that every year, Madoff had to send an IRS Form 1099 to each of his investors, reporting their fraudulent earnings to them as taxable events on which they dutifully paid the taxes.

The fact now shown that there were no actual earnings raises serious tax questions for those who paid taxes not due on income not actually earned.

When the term over which Madoff committed his tax fraud is added to this equation, the reported $50 Billion (I will bet the real number is much larger) he compiled had to have paid out many billions of dollars in taxes to the defrauded “beneficiaries”. Does the IRS now have to return those taxes plus interest to those who unwittingly paid taxes not due on phantom income never really earned?

And what about the real capital Fraud losses now faced by the victims of Madoff? Does anyone get the tax implications of this? [entire post]

Tags: constitutional congress, losses to increase, madoff, naked short selling, political will, tax implications, trillion laundered
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Madoff Losses Ratcheted Up To $65 Billion, Is Anyone Surprised?

June 20, 2009 (By Bud Burrell)

From “Front & Center”, by Bud Burrell

I predicted that the original estimates of $50 Billion would be upped as investigators got into the Madoff accounts. Yesterday, they announced that the amount of the losses was increased to $65 Billion, and I would bet the number goes higher before this is over.

The question becomes why wasn’t the number accurate to start with? Monday, following the 60 Minutes Redux piece covering Harry Markopolos’ ground breaking work on Madoff, the SEC IG went into take a 3 hour statement from Madoff, presumably on who at the SEC rejected his original findings presented no fewer than 5 times formally, and how they could justify ignoring his analytical work.

I would bet that the SEC IG will again find specific failures on the part of the SEC staff, which findings they will reject as being without foundation. The SEC IG is clearly unarmed for this battle, and he needs to bring in the DOJ and the FBI. If that doesn’t happen, the SEC must be broken up, along with its close associate, FINRA. [entire post]

Tags: $65 billion, 60 minutes, amorality, counterfeiting, finra, losses up, madoff, madoff exemption, markopolos, sec ig, sec staff, sociopathy, tina turner
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Offshore Banking Scandal Continues… What Indictments?

June 12, 2009 (By Bud Burrell)

From “Front & Center”, by Bud Burrell

Going back some six years, I have repeatedly commented on and described the shameful crises of offshore banking, brokerage, hedge funds, naked shorting, money laundering, and support for terrorism. I have heard promise after promise of additional pending indictments, or recovery of stolen funds, or both, and I have patiently waited for the system to work.

It has all been for naught, as not a single indictment of a material character has come down except for the notorious Amir Elgindy, other than the truncated action against the criminal Badian brothers, and their coterie of facilitators. The manipulation of Sedona Corporation by this conspiracy should be the best case in the industry, yet all the Federal authorities have done is blow the case by the numbers. Further, there is even less evidence of any material recovery of the funds spirited offshore by these highly organized criminal enterprises. [entire post]

Tags: adfa, arkansas, bcci, cia, copetas, corporations, curshen, elgindy, fbi, iran contra, jurisdictions, kwitny, madoff, marc rich, mena, money laundering, offshore banking, offshore brokerage, red sea management, sedona, spe's, special purpose entities, terroism, us attorneys, venues
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