Bankers kept silent over Madoff fears

[Robbien]

Source: Guardian

Senior executives at some of Wall Street's biggest firms were convinced Bernard Madoff was a fraud as early as 2005 yet none of them alerted the authorities, documents filed with the US Securities and Exchange Commission (SEC) reveal.

Leon Gross, the former managing director in charge of worldwide equity derivatives research for Citigroup, told colleagues in 2005 that he thought Madoff was being less than honest about the returns he could make for investors.

Joanne Hill, Goldman Sachs's global head of equity derivatives research, believed something was wrong with Madoff's investment scheme because the returns seemed too good to be true. Like Gross, Hill did not alert her superiors nor the regulatory authorities. She did tell friends and colleagues on Wall Street about her suspicions.

. . .

Options traders at the Chicago Board Options Exchange (CBOE) were so angry about Madoff's scheme that they wanted the world to know he did not use their trading platforms. However, they did not tell regulators about their suspicions.

. . .

"Back in 2005, according to Markopolos's testimony, the Madoff fraud was about $7bn and there were few small-time individual investors," he added. "When he turned himself in three years later the fraud was $50bn and dozens of retirees, charities and others had been bankrupted."

Read more: http://www.guardian.co.uk/business/2009/feb/15/madoff-fraud-wall-street

---

These silent bankers are the same ones getting the million dollar bonuses.

[PM Martin]

1. Poor bankers

:cry: :sarsasm:

The only reason they stayed "silent" was/is because they are in on the various scams and have received the infamous bonus and "retention awards". :puke:

[HowHasItComeToThis]

24. BANKER'S MOTTO

I WON'T TELL ON YOU IF YOU DON'T TELL ON ME.

[underpants]

2. Oh my more victims

:eyes:

[LakeSamish706]

3. I still thing this whole thing was set up by the Bush misAdministration as...

a form of another Pearl Harbor to bring the country to its knees.

[Ghost Dog]

4. Yeah. This gets close to the heart of it

at long last.

Who didn't know?

[UpInArms]

5. SEC - was it LIHOP or MIHOP?

blind eyes - silenced the barking of dogs by giving the henhouse to the foxes

that about sums up the Bush Mal-Administration

[MO_Dem]

6. These are examples of the "brains"

that they will lose if they can't hand out mulit-million dollar bonuses!! :mad:

[dixiegrrrrl]

26. "Bonuses" or "hush money"?

Anyone here still using BOA, Citi or Chase banks....hmmmmmm?????

I refuse to buy bullets for the oppressor's guns...

[Riverman]

7. Hang Them All on a Public Square - On Primetime TV!

[Proletariatprincess]

8. The US system is corrupt to its very black heart.

Madoff was caught...that was his only mistake in the eyes of these scurrilous bankers.
I don't see a way out of this for this country. The corruption permeates every aspect of every institution. It isn't just the banks, or Wall street, it is everything. The courts, the entire justice system, the for profit health care system, the prison industrial complex, foreign policy for profit and adventure. Even our schools and universities have to deal with students who think cheating is ok sometimes.
The USA: the self identified most religious country on earth and it is utterly morally bankrupt.

[truedelphi]

11. Reading a really fab women's mystery/thriller last night

The author delved into how it is that the drug cartels south of the border now go about purchasing entire banks so that they can launder their monies.

The banks can be in Tijuana, in San Diego, in Phoenix or Miami. (Probably every other city as well.)

About a third of a page was used to detail that during the Clinton era, twice investigations of drug cartels in Mexico were stopped by the Mexican government using influence and threatening our country. On some level, the corruption of Mexico is so pervasive - the two things holding the country together are the billions sent back by immigrants who come here and send money back, and by the sales of illegal drugs.

I speculate that part of this notion of "bundling" things together, and then not being unable to unscramble the pieces (such as comes up when an American asks, what financial institution holds my mortgage and title papers today?) relates to the notion that if things are too clear, the laundering that the banks are doing would not shield the participants from being charged with criminal activity. And since the major bank participants are bank owners, what a sorry mess of corruption.

[norepubsin08]

20. I agree with you fully!

Welcome to DU

[babylonsister]

9. Baloney. I think there were a lot of people protecting him. Or they

were too dumb to hold the positions they held. SEC?

Yea, baloney. Keep digging.

[Baby Snooks]

10. Or just protecting themselves...

We are a country of these little "clubs" with their "codes of honor" and in the end they always protect themselves by protecting even the worst of their own. Worried about their "public image" they are which is to really say they worry about getting caught themselves. Honor among thieves as they say.

[wroberts189]

12. This story is not going away ..this guy will end up in jail.

Of course at his age he has already had a full life.

Strip his assets ..send him to Walmart ..even worse then jail.

[Baby Snooks]

13. He may but not for what people think...

The real fraud was his representation of equities held on behalf of investors that he either never held or no longer held. I doubt, as do others, that we will ever really know what happened.

Those statements he sent to investors are probably what will be the basis of any indictments. As for the losses, well, investments are not insured. The only reason why the investors will receive anything from the SEC fund is because of those statements. Apart from that, well, just as it's buyer beware, it's investor beware.

[wroberts189]

16. Well I cannot think of a more deserving soul ..

oh wait a minute ..the whole bush admin.


I think slow. Type even slower

50 billion... they WILL find out. Whats that saying ..? "Lose a thousand you can hide. Steal a million you will die."

Ok I made that up but HE STOLE 50 BILLION dollars.

50 BILLION dollars !!!!!!!!!

There are some seriously angry people out there and they will want it back.

What about paper trails?
What about snitches?
What about he spends a few nights in jail?

I am surprised he did not do a Ken Lay. Probably too old for the plastic surgery.

Ever try to move money without it getting recorded somewhere? Not possible unless its cash ... and most do not put it in a mattress anymore. The withdraw will still show on the bank record.

But I am sure the few have their ways.

[Baby Snooks]

17. Well, sort of stole it....

Keep in mind the investors were getting a nice return on their money. Year after year after year. Those who had invested with him for ten years or longer probably saw a 100% return. Some saw more.

Common sense tells you, or should, that you cannot run a Ponzi scheme for almost 50 years. That's how long Bernie Madoff was in business. And until December, he had a very stellar reputation. Something happened at some point. And what happened, and what followed, is obviously what we many never know. There is a question as to how much was lost. The initial figure was 50 billion. Then according to an AP story, it was 30 billion. Some apparently adjusted their losses to take into account the amounts they had laundered through Bernie Madoff to evade taxes. As did quite a few through UBS. Have you seen any indictments in the UBS matter?

Some would probably prefer the matter not be investigated. The SEC for example moved quickly to "settle" with him in the civil matter. Which raised some eyebrows. And some questions.

[islandmkl]

23. he STOLE it...the fact that some, even many, got 'great' returns on their investment(s)...

only spoke to the length of time and number of new investors Madoff was able to sustain...

the ponzi game does not change, not one iota, just because of the levels of participation...some shmuck has pulled this same scheme for 10 or 20 thousand dollars screwing people out of $10 or $100 'investments'...

[digidigido]

21. Have him be a greeter there, punishment fits the crime

[The Backlash Cometh]

14. Hmmm...so what was going on in the last three years to accelerate the bilking?

[antimatter98]

15. This is financial terrorism. Let's apply the Patriot Act to these guys. n/t

[Earth_First]

18. I'd just as much rather have the patriot act revoked completely. n/t

[Left Coast2020]

22. As stated, this may take awhile to unravel by Obama Admin.

And it will take up precious time to focus on other important matters i.e. Putting the Bush Crime Family behind bars for their greed and criminal acts. I still want to know what happened to the $9-billion that went to Iraq. Somebody knows something. :shrug:

[Hannah Bell]

19. I think it was a money transfer/money-laundering scheme, & furthermore,

I think some of the "losers" were in on it.

Originally, for example, walter noel's fairfield greenwich was reported to be the biggest "loser". now it's looking like he was a madoff middleman & partner in crime.

but he's still out at the social watering holes, he made 20% plus on every transfer & probably off-shored it.

http://www.topix.com/city/greenwich-ct/2008/12/fairfield-greenwich-investors-seek-out-walter-noels-offshore-accounts

http://guestofaguest.com/socialites/madoff-investor-walter-noel-bouncing-back-in-style/

Plus, his "charitable foundation" is looking like a way to channel social quid-pro-quos:

http://guestofaguest.com/socialites/if-the-money-didnt-go-to-charity-then-where-did-it-go/

Cityfile acquired the statements of the Walter and Monica Noel Family Foundation for 2006 which showed $169,000 in donations. Compared to the many millions of dollars in fees he made funneling his investors money into Bernard Madoff, it seems relatively small. And given the large overhead costs of running a foundation it almost seems not really worth the effort. Moreover, many of the “donations” look to be in the amount of a ticket or “social toll” to a charity gala, essentially a write off for a night on the town. Opinions aside, their giving could have ramped up a lot in ‘07 and ‘08, we simply don’t know. But what other “charitable” interests or hobbies did they have other than “giving” to Bernie Madoff?

Oh right, politics! Mitt Romney, John McCain, Rudy Giuliani, and George W. Bush all received hefty personal donations from Walter and Monica from 2004 onward. So this doesn’t actually explain where the other millions actually went (aside from $20 million dollars in real estate), but it does show they are one big happy Republican family.


I've also seen a couple of mentions of "Columbia" in connection with the Noels, with the implication of drug ties.

Money laundering, anyone?

[Baby Snooks]

25. Walter Noel...

The media for some reason seems to be ignoring him and his own involvement in his investments with Madoff on behalf of his clients. Not to mention his sons-in-law which do raise some questions about his international dealings. Along with Madoff's. The Noels are not really "social" at this point given the number of people who lost entire fortunes not only with Bernie Madoff but with Walter Noel. Many trusted Walter Noel the way many trusted Bernie Madoff. One of the harsh realities of life in America at this point is only fools trust anyone.

The media will probably continue to ignore him for some reason. The way the media ignores a lot of things in this country.

[aquart]

27. Uh, "Columbia" might mean university donations.

Colombia is the cocaine country.

[Hannah Bell]

29. my misspelling. colombia it was, & the comments made it clear it was the country.

it was in reference to the recent assassination of a drug kingpin.

[Robbien]

28. Bernie's friends and family may not have lost their money

Over at Talking Points Memo there is a post up about a mysterious NTC & CO. partnership

http://tpmcafe.talkingpointsmemo.com/talk/blogs/mrs_panstreppon/2009/02/bernie-madoff-parsing-the-clie.php

I never believed the party line that one day in December, Bernie told his sons he was operating the biggest Ponzi scheme in the world and the next day, they turned their father into the FBI. That's not the way it works if you are rich. Your lawyers negotiate with the AG or the US Attorney before you turn yourself in for doing something you were going to get caught doing anyway.

I suspect Bernie's plan to own up to the fraud was as elaborate as the scheme itself and I think it was initiated long before December of 2008. Peter Madoff and Paul Konigsberg both transferred ownership of their Palm Beach County homes to their wives in late 2006 and mid-2007 for a reason.

The NCT partnership may have been set up in late 2007 to make it appear that Bernie's friends and relatives lost their own money investing with Bernie, which would then serve as prima facie evidence they knew nothing of the Ponzi scheme.

Or perhaps the partnership was set up to draw money out of Bernard L. Madoff Investment Securities and the names were never intended to become public.

The entire entry is worth a read.

[Samantha]

30. Gives new meaning to the term "silence is golden" when

reflecting on how the silence of Wall Streeters destroyed so many investors but yielded huge rewards for them in terms of their continued mind-boggling bonuses and bailout by taxpayers.

Sam