SEC Charges Madoff Advisers With Fraud

U.S. officials have filed civil charges against two of the so-called feeder funds that helped Bernard Madoff find investors. They say the firms knew — or should have known — that Madoff was operating a giant Ponzi scheme.

Copyright © 2009 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

RENEE MONTAGNE, host:

NPR's business news starts with more charges in the Madoff scandal.

(Soundbite of music)

MONTAGNE: The government is bringing civil charges against two financial firms in connection with Bernard Madoff's multibillion dollar Ponzi scheme. Regulators say executives helped funnel money into Madoff's operation and knew, or should've known, what was going on.

NPR's Jim Zarroli has more.

JIM ZARROLI: Among those charged by the Securities and Exchange Commission, were three senior executives at Cohmad Securities, which had an office in the same Manhattan building where Madoff was based. A lawsuit filed by the SEC says Cohmad served as an in-house marketing firm for Madoff, collecting investor dollars and funneling them into Madoff's operation. The suit says, in exchange, Cohmad collected millions of dollars in fees. An attorney for one of the executives charged said the suit smacks of impulsiveness and self-justification.

The SEC also filed civil charges against California money manager Stanley Chase, who steered about a billion dollars toward Madoff's firm. According to the SEC, Chase once told Madoff he didn't want to see any losses on the balance sheets of the clients he brought in. And for nearly a decade, Madoff complied with that request. But Chase's attorney noted that his client and his family lost everything in the collapse of Madoff's empire. And, he said, that would be an impossible result, were Chase himself involved in the underlying fraud.

Jim Zarroli, NPR News, New York.

Copyright © 2009 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.