Madoff Complying with Assets Disclosure Deadlines
Madoff complying with assets disclosure deadline
NEW YORK (Reuters) - Accused swindler Bernard Madoff was complying with a court-ordered deadline to tell U.S. regulators how much money he has left, as lawmakers prepared to take their first close look at the alleged scheme that duped investors worldwide.
A lawyer for the 70-year-old investment adviser, who is under house arrest in his Manhattan apartment and subject to electronic monitoring, said a list of assets, liabilities and property would be sent by the Wednesday deadline to the U.S. Securities and Exchange Commission under a December 18 court order.
"That material will be filed today," said Madoff's attorney, Ira Lee Sorkin. "It will be done pursuant to the court order. It will get there on time."
Sorkin declined further comment, and a spokesman for the SEC declined to comment.
The regulator is not required to immediately publicly file such disclosures with the courts. The information becomes part of an investigation into how Bernard L. Madoff Investment Securities LLC was run and how some $50 billion in losses can be recovered by investors.
Investors include wealthy society in the Americas and in Europe, banks, celebrities and charities all over the world in what could be Wall Street's biggest fraud. Madoff confessed to his sons that he ran a Ponzi scheme for years, in which early investors are paid off with the money of new clients, according to court documents.
Madoff, a former chairman of the Nasdaq stock market, was also criminally charged on December 11 by U.S. prosecutors in New York, but he has not appeared in court to formally answer the charges.
CONGRESSIONAL PANEL HEARING
A U.S. lawmaker said Wednesday the internal watchdog at the SEC will testify Monday at a hearing in Washington on how it failed to detect the purported fraud.
Critics claim the SEC missed warning signs and failed to uncover the scandal until Madoff's sons went to authorities three weeks ago. According to court papers, Madoff said it was "all his fault". No one else has been charged.
SEC Chairman Christopher Cox has asked the agency's inspector general, David Kotz, to probe its conduct in the case.
Kotz will testify at a U.S. House Financial Services committee hearing. It will help lawmakers who are planning "the most substantial rewrite" of laws regulating the U.S. financial markets since the Great Depression, said Rep. Paul Kanjorski, a Pennsylvania Democrat and chairman of the subcommittee on capital markets.
Also appearing will be Harry Markopolos, the former chief investment officer at Rampart Investment Management who said he repeatedly tried to get the SEC to investigate Madoff, and Stephen Harbeck, president of the Securities Investor Protection Corp. The nonprofit SIPC was created by Congress in 1970 to maintain reserves to help investors at failed brokerage firms.
The SIPC has said it expects it will take several years to find the money in remote locations and sort through investor losses from the alleged fraud. Its money can be used to satisfy claims of each customer up to a maximum of $500,000. The figure includes a maximum of up to $100,000 on claims for cash.
The court-appointed trustee of the firm, which is being liquidated, is looking into the sale of the trading operation. Madoff ran the investment advisory business separately and was 'cryptic' about it, according to court papers. The wide scope of Madoff's business continued to reverberate with word that Austria's financial regulator will soon step in to run Vienna-based Bank Medici, in what would be the first known case where a government had to step in to help a bank cope in the wake of the Madoff scandal.
A source with direct knowledge of the matter said Wednesday the regulator would appoint a supervisor to the bank's management in the coming days. With a supervisor in place, the bank cannot take important decisions without state consent.
A spokeswoman for the bank said it would welcome such a step and cooperate with authorities.
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