A US hedge fund, Fairfield Greenwich, has been charged with fraud for pumping nearly $7 billion of its clients’ money into Bernard Madoff’s corrupt investment empire with “total disregard” for any checks on the renegade financier’s activities.
The action, by Massachusetts’ securities regulator, is the first to be taken against any of the so-called “feeder funds” that channelled billions of dollars in the direction of Madoff, who was jailed last month…
The Fairfield Greenwich hedge fund caught up in the scandal is run by Walter Noel, a high-profile New York society figure whose glamorous family was once described by Vanity Fair magazine as “shoring up the virtues of a nearly extinct aristocracy”.
Charges filed by Massachusetts’ secretary of state, William Galvin, said 95% of the firm’s $7.2bn Sentry fund was invested with Madoff, who admitted in court last month that he had barely done any genuine trading for nearly two decades.
Through a 1% commission fee, Fairfield earned $100m a year from pushing money in Madoff’s direction.
Galvin’s charges said: “They were blinded by the fees they were earning, did not engage in meaningful due diligence and turned a blind eye to any fact that would have burst their lucrative bubble.”
Crooks paying commissions to crooks surely sounds like conspiracy.
Reads like Count de Moné. Only the investors are left holding the piss bucket.
Should have bought the SPY or the QQQQ. They would have only lost 40 percent.
Only 1% commission? That actually sounds pretty damn low, and it certainly wouldn’t trigger any alarms like most scams do. Most high risk investment, such as “limited parterships”, pay like 20%. Hell, your 401k/IRA gets dinged for higher commissions that than to invest in mutual funds.
I dunno. Unless the feeder knew that Madoff was a fraud, then I really don’t see anything unusual here.
“…virtues … aristocracy”
ROTFLMAOSMISMPAWUTN
It keeps getting worse and worse
Life in high society I guess
Bunch of immoral locusts
“Crooks paying commissions to crooks surely sounds like conspiracy.” And pumped up by a corrupt magazine. LOL
….”total disregard” for any checks on the renegade financier’s activities.”
Isn’t that what the SEC is for?
#3 – sounds like you don’t know how to manage your mutual funds.
#7, Tim,
Isn’t that what the SEC is for?
Well, at one time it was. Then there was a President that had the SEC relax their oversight and inspection.
BUT, as the Liebertarians like to remind us, there is this thing called “personal responsibility”.
What gets me is the seeming implausibility of it all. I mean, there have to have been _some_ people working at this place other than Madoff and his two sons: people to answer the phone, open the mail, send out bills and payments and so forth. Didn’t any of them wonder, “Where are all the traders?” A firm that big should have had dozens of them. They would have swaggered around in meetings, company gatherings, etc. Anyone who ever went to their offices or hung around on the exchanges should have noticed this.
At least it seems so to me, admittedly no expert.