BERNIE'S FAKE TRADES
REGULATORS: NO TRACE OF MADOFF STOCK BUYS SINCE 1960S
By JAMES DORAN
Last updated: 4:08 am
January 16, 2009
Posted: 4:05 am
January 16, 2009
nypost.com
The mystery surrounding Bernard Madoff's alleged $50 billion Ponzi scheme deepened further yesterday after the securities industry's watchdog said there was no evidence that the accused swindler ever traded a single share on behalf of his clients, suggesting financial irregularities going back to the 1960s.
Officials at the Financial Industry Regulatory Authority, known as FINRA, told The Post that after examining more than 40 years' worth of financial records from Madoff's now-defunct broker dealer, there are no signs that Bernard L. Madoff Investment Securities ever traded shares on behalf of the investment-advisory business at the center of the scandal.
The startling findings contradict statements that Madoff's advisory clients received showing hundreds, if not thousands of trades, completed by the broker dealer every year.
"Our investigations of Bernard Madoff's broker dealership showed no evidence that any shares were ever traded on behalf of his investment advisory business," a FINRA spokesman said, adding that the regulator has looked at Madoff's books going back to 1960.
Ira Lee Sorkin, a Madoff lawyer, declined to comment.
Madoff was arrested last month after his sons said their father had confessed to them that his investment-advisory business was a Ponzi scheme that had bilked $50 billion out of wealthy friends, vulnerable charities and universities. Madoff remains free on $10 million bail.
While his advisory business is at the center of the scandal, all signs point to Madoff's broker dealer being a legitimate business that traded shares wholesale on behalf of investment banks, mutual funds and other institutions.
Madoff was previously vice chairman of FINRA's predecessor NASD. He was also a member of the Nasdaq stock exchange, where he served as chairman of its trading committee.
Richard Rampell, a Florida-based certified accountant who counts as clients several of Madoff's victims, said his review of dozens of statements supports FINRA's findings.
"Everything I saw on those statements told me that Madoff was clearing his own trades," he said. "There was no third party mentioned on any of those statements."
Steve Harbeck, CEO of Securities Industry Protection Corp., the outfit overseeing the Madoff bankruptcy to ensure clients get some sort of compensation, said his findings are similar to FINRA's.
"I do not have any evidence to contradict that," he said. "This is an amazing story that something like this could have gone on undetected for so long."
Harbeck added that he believed Madoff has been defrauding clients for at least 28 years. "I have seen evidence to that end and I have nothing to contradict it," he said.
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