South Florida Arbitration & Litigation Lawyer BlogSecurities and Exchange Commission v. Peter Madoff, 12-Civ-5100 (S.D.N.Y.)
SEC CHARGES PETER MADOFF WITH FRAUD AND FALSE STATEMENTS TO REGULATORS
June, 2012:
Articles Posted in Recent Madoff Financial News
SEC Charges Longtime Madoff Employee with Falsifying Documents to Deceive Regulators
December, 2011:
The Securities and Exchange Commission recently charged a longtime Bernie Madoff employee with falsifying books and records in order to hide Madoff’s fraudulent investment advisory operations from regulators.
The SEC alleges that Enrica Cotellessa-Pitz, who worked at Bernard L. Madoff Investment Securities LLC (BMIS) for more than 30 years, assisted in falsifying BMIS’s internal accounting records in order to misclassify hundreds of millions of dollars of income purportedly generated by BMIS’s investment advisory operations. Cotellessa-Pitz also falsified financial statements filed with the SEC and other regulators as well as materials that were prepared to deceive SEC staff examiners, federal and state tax auditors, and other external reviewers.
Madoff Fallout – David Kugel
November, 2011:
As part of the continued fallout relative to the Madoff fraud, the Securities and Exchange Commission (SEC) charged a longtime Bernie Madoff employee with fraud for his role in creating fake trades to facilitate the massive Ponzi scheme.
The SEC alleges that David Kugel, who worked at Bernard L. Madoff Investment Securities LLC (BMIS) for nearly four decades, was asked by Madoff to provide the firm’s investment advisory operations with backdated arbitrage trade information to be formulated into fictitious trading on investors’ account statements. Kugel’s own account at BMIS was among those in which backdated trades were entered, and he withdrew nearly $10 million in “profits” from the fictitious trading over several years.
The Ponzi Victim Tax Break Bill Seems to be Dead for Now
While this post does not relate exclusiverly to the Madoff situation that has impacted so many people throughout the country, legislation that would have provided tax breaks to Ponzi scheme victims failed to make it out of committee. While support for companion bills HR 5058 and S 3166 had continued growing over several months, neither measure was considered in either chamber of Congress. The bills would have increased the number of years that victims could declare net operating losses due to Ponzi schemes in an effort to recoup taxes they already paid on nonexistent earnings. Similar legislation is likely to be introduced this year. For a look at last year’s bills, visit www.thomas.loc.gov for more information on this matter.
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New York State Sues Ernst & Young Over Lehman Brothers Accounting Problems
Lehman Brothers/Ernst & Young:
The fall-out from the Madoff fraud continues. New York Attorney General Andrew Cuomo sued Ernst & Young, saying the accounting firm helped Lehman Brothers Holdings take actions to deceive the public about Lehman’s financial condition. “This practice was a house-of-cards business model designed to hide billions in liabilities in the years before Lehman collapsed,” Mr. Cuomo said Tuesday in a statement. “Just as troubling, a global accounting firm, tasked with auditing Lehman’s financial statements, helped hide this crucial information from the investing public.” The state seeks to recover fees collected by Ernst & Young Mr. Cuomo said.
Lehman, once the fourth-largest investment bank, failed in September 2008 because of risky real estate bets and too much debt, which it tried to hide from investors, according to bankruptcy examiner Anton Valukas’ report. Mr. Valukas, in his report, said Ernst & Young could be sued for “professional malpractice” for its role as auditor.
New York Life and MassMutual Sued Over Madoff Investments – Boca Raton, Florida FINRA Arbitration and Litigation Attorney
Madoff News:
December 17, 2010:
A machinery manufacturer last week sued New York Life Insurance Co., claiming it had lost money in variable universal life policies that were invested in funds linked to the Madoff scandal. Experts say similar suits are likely to follow.