Council’s pension fund ‘caught up in Wall Street fraud’
A UK council admitted today that it could lose more than £7 million from its pension fund which has been caught up in the alleged Madoff fraud.
But Hampshire County Council moved to reassure its fund’s 46,000 contributors and 27,000 pensioners that their payouts were not at risk.
It emerged yesterday that alleged victims who sunk cash into veteran Wall Street money manager Bernard Madoff’s investment pool included some of the world’s biggest banking institutions and hedge funds, the super rich and the famous, pensioners and charities.
The 70-year-old Madoff (pictured), well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested on Thursday in what US prosecutors say was a £33 billion scheme to defraud investors.
Hampshire says its losses could reach £7.1 million, 0.3% of its pension fund’s total assets of £2,400 million.
A spokesman said: “Whilst any losses are deeply disappointing, they should be seen in the context of the much larger falls in the overall value of the Fund as a result of the financial crisis from £3,100 million in October 2007 to £2,400 million now, a fall of £700 million (22.5%).”
Council leader Ken Thornber added: “The actual position remains to be seen and Hampshire’s exposure is extremely small relative to other investors.
“Nevertheless the Hampshire Pension Fund is very concerned that a small proportion of its investments may be at risk because of this alleged fraud.”
In addition to Hampshire County Council, the list of major investors who have funds tied up in Wall Street money manager Bernard Madoff’s investment pool includes major banks, charities, and the rich.
Here are some of the people and institutions who say they were caught up in the 50 billion dollar fraud, including the amount of exposure for each investor.
Fairfield Greenwich Group 7,500,000,000 dollars
Grupo Santander SA 3,200,000,000 dollars
HSBC Holdings PLC 1,000,000,000 dollars
Natixis 617,000,000 dollars
Royal Bank of Scotland Group PLC 612,000,000 dollars
BNP Paribas 480,000,000 dollars
BBVA 452,000,000 dollars
Man Group PLC 360,000,000 dollars
Reichmuth & Co 332,000,000 dollars
Nomura Holdings 304,000,000 dollars
Unicredit 103,000,000 dollars
Union Bancaire Privee “hundreds of millions of dollars”
Benedict Hentsch & Cie SA 48,300,000 dollars
Fairfield Town Employees Board
and Police and Fire Board (Fairfield, Connecticut) 41,900,000 dollars
Mortimer B. Zuckerman Charitable Remainder Trust 30,000,000 dollars
The Phoenix Holdings 5,000,000 dollars
Harel Insurance Investments & Financial Services 14,300,000 dollars
Societe Generale below 13,700,000 dollars
Credit Agricole below 13,700,000 dollars
Robert I. Lappin Charitable Foundation 8,000,000 dollars
Nordea 6,600,000 dollars
Neue Privat Bank 5,250,000 dollars
Fund manager in scandal once boasted about profits
December 16 2008
In this Thursday, May 13, 1993 file photo, Richard Grasso, president, New York Stock Exchange, left, joined by former Security and Exchange Commission Chairman, David S. Ruder, center, and Bernard Madoff, chairman of Madoff Investment Securities, appear before the House subcommittee on Telecommunications and Finance in Washington. Damage continued to ripple from the massive fraud allegedly engineered by storied Wall Street money manager Bernard Madoff Monday, Dec. 15, 2008, even as investigators worked to unravel the scheme’s working and its reach. (AP Photo)
The money manager accused of duping investors in one of Wall Street’s biggest Ponzi schemes once boasted to the Securities and Exchange Commission about how much money he earned and formally advised the U.S. government on ways to protect investors from scam artists.
Now Bernard Madoff stands accused of being one.
The 70-year-old Madoff (MAY-doff), well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested last week in what prosecutors say was a $50 billion scheme to defraud investors, including the world’s big banks, the rich and the famous.
Alleged victims include the family charitable foundation for Sen. Frank Lautenberg, D-N.J.; a trust tied to real estate magnate Mortimer Zuckerman; and a charity of movie director Steven Spielberg. The Wall Street Journal reported that the foundation of Nobel laureate Elie Wiesel also took a hit.
As the scale of the alleged scheme was realized, attention turned quickly to Madoff’s connections to Washington regulators responsible for monitoring investment funds like the one Madoff operated. He knew everyone, former SEC chairman Arthur Levitt said in an interview with The Associated Press. Levitt said he did not invest any money with Madoff.
The director for enforcement at the SEC, Linda Thomsen, said the government was working with federal prosecutors and the FBI to understand the case, “to pursue the case we’ve got, to preserve assets to the extent we were able and to bring everyone who was responsible for the conduct at the Madoff firm. It’s justice,” she said Monday.
At one SEC hearing in April 2004 — during the period when Madoff is accused of carrying out his $50 billion fraud — Madoff joked with then-commission chairman William Donaldson about Madoff’s own extraordinary profits and teased that he wasn’t inclined to provide any advice that might help his business rivals.
“Our firm has made a fairly decent living as a fast market competing with a slow market,” Madoff said, “so I’m not sure it’s in our own best interest for everyone to become a fast market.” Commissioners laughed openly as Madoff agreed “to take off our selfish hats here and speak for the public good.”
As a former Nasdaq chairman, Madoff was an expert sought by Washington regulators who asked for advice on any number of regulatory issues over the years. In 2000, Madoff served on the government’s Advisory Committee on Market Information, established to protect investors by ensuring accurate and full public disclosure of information to them.
Financial analysts raised concerns about Madoff’s practices repeatedly over the past decade, including one letter to the SEC as early as 1999 that accused Madoff of running a Ponzi scheme, but the agency did not conduct even a routine examination of the investment business until last week, The Washington Post reported on its Web site Monday night.
Questions have been raised in two earlier cases about the SEC’s handling of investigations involving influential figures on Wall Street or powerful investment firms.
The agency’s inspector general, in a report issued this fall, said there were “serious questions” about the impartiality and fairness of the SEC’s insider-trading investigation in 2004 and 2005 of hedge fund Pequot Capital Management. A former SEC attorney who worked on the probe and was fired by the agency told Congress he was blocked by agency superiors when he tried to question John Mack, now chairman of the Morgan Stanley investment house.
The SEC took no enforcement action in the Pequot case. The hedge fund and Mack have denied any wrongdoing.
In another report, the inspector general, H. David Kotz, determined the head of the SEC’s Miami office failed to properly enforce securities laws in the investigation of now-defunct Bear Stearns’ pricing of complex investments it sold, and found that he shouldn’t have closed the inquiry in the summer of 2007 without enforcement action.
Bear Stearns nearly collapsed into bankruptcy in March and was purchased by rival JPMorgan Chase with a $29 billion federal backstop.
Last month, an administrative law judge at the SEC rejected Kotz’s conclusions and his recommendation for disciplinary action against Thomsen, the agency’s enforcement director, and two other officials in the matters. The judge, Brenda Murray, wasn’t acting in her capacity as an administrative law judge but rather as an SEC official asked by the agency’s executive director to assess the inspector general’s findings.
Well if there is one thing America can do is allow criminals to make a fortune on innocent victims. Capitalism at it’s finest hour. I am quite sure however Bernard is not the only one who does this. This is probably and unfortunately the tip of the iceburg.
Hedge Funds are not regulated. But then again many things are not regulated in the US. “Deregulation” the banshee cry of George Bush and Capitalism has hit the fan yet again.
Capitalism, profiteering certainly helps criminals I must say.
All I can say is NEXT!
So who is willing to listen to anything Wall Street says?
Who in essence is that stupid I mean?
They have pretty much messed up the entire planet with their “GOOD” advice and their “I am a genius attitude”.
America the land of opportunity. Especially if your a thief.
George Bush accuses anyone and everyone of being a criminal. He should be cleaning up his own back yard, but instead because of his policies, he has created a den of thieves. The saga continues until the “NEXT” catastrophe hits. How can you trust a country that rips off anyone and everyone around the world.
They didn’t even regulate the war coffers. Contractors were stealing hand over fist as well. Seems the American people and everyone in the rest of the world are continually being ripped off.
Seems that “private sector” has it paws in the pockets of everyone.
The “Den of thieves” is a rather long list and getting longer.
The corruption in America runs deep and has been there for some time. One would need a a few giant roto routers to find it all.
The American government enables the criminals however. They are just a corrupt however. Politicians can be bought and sold.
The slim of Capitalism and Privatization has slithered into every country around the world.
When there is no oversight as to what corporations or businesses do criminals are sure to take advantage of it.
Like Haliburton, banks, wall street, insurance companies, oil companies etc etc etc .
Corruption in the US is a way of life.
Those who make the laws actually protect those who commit the crimes. They even protect themselves.
Like Bush trying to have himself and his war crimes helpers get off the hook. That is so special.
The shoes belted at his head certainly is mild in comparison to the numbers of people that Bush and his Cronies are responsible for murdering in an illegal war.
The theft of Tax dollars by the contractors and crimes comitted by those hired by the Bush administration, I guess has been long forgotten.
Corruption is common place in the US. It would be a simpler task to look at what isn’t Corrupt in the US. It might be a very short list.
It’s just a pity it has slithered into every country around the world.