According to the L.A. Daily News, Securities and Exchange Commission (SEC) Chairman Christopher Cox said his agency neglected to pursue allegations of wrongdoing by Bernard L. Madoff, the alleged perpetrator of a $50 billion Ponzi scheme for the last ten years. As a result, Cox ordered a probe by the SEC’s inspector general, saying the agency’s staff had never brought the Madoff matter to the attention of commissioners.
Madoff, the former chairman of the NASDAQ Stock Market, was arrested December 11th and charged with a single count of securities fraud, which if proved, may rank among the biggest frauds ever—totaling $50 billion of fraudulent losses. A Ponzi scheme—sometimes called a pyramid scheme—is a fraudulent investment operation where investors receive abnormally high returns out of the money paid in by subsequent investors, rather than from the profit from any real business.
Many of the investors allegedly swindled by the Wall Street money manager are Jewish philanthropists and non-profit organizations. The Daily News article states that the effect of the loss to Jewish philanthropic world is nothing less than “catastrophic,” however at this time it doesn’t appear the fraud has had any effect on Los Angeles organizations.
Comments about this post can be directed to Irvine White Collar Crime Attorney William Weinberg at (949) 474-8008.