Madoff middleman Jaffe testifies in Massachusetts - Robert Jaffe VP- Cohmad Securities Corp

Madoff middleman Jaffe testifies in Massachusetts
Wed Feb 4, 2009 3:16pm BOSTON (Reuters) - A broker who introduced clients to accused financial swindler Bernard Madoff testified before Massachusetts financial regulators on Wednesday, 10 days after a judge ordered him to answer their questions.

Robert Jaffe "made an appearance today before officers of the Massachusetts Securities Division," Secretary of State William Galvin's office said in a three-paragraph statement.

Jaffe's testimony had been anticipated for weeks and ends, at least for now, a four-week legal skirmish between the state's dogged securities regulator and the debonair broker.

Jaffe, who used his deep Boston roots to introduce wealthy investors to Madoff, failed to show up for his first meeting with Galvin because he was being treated by a physician. After Jaffe failed to show up for a second time, Galvin appealed to a judge, who then ordered Jaffe to testify before February 6.

Galvin was one of the first state regulators to probe how Bernard Madoff allegedly engineered the world's biggest Ponzi scheme that lost investors $50 billion. The Massachusetts state pension fund lost $12 million to Madoff.

Since December, when Madoff was arrested, Galvin has been particularly interested in Cohmad Securities, a firm that marketed Madoff's investment products and where Jaffe has worked for nearly two decades.

Galvin's office said it will not report how Jaffe answered the questions.

Jaffe, who owns homes in a wealthy Boston suburb and Palm Beach, Florida, is the son-in-law of one of Madoff's biggest investors, Carl Shapiro, and brought in much of Madoff's business, people who know his investors said.

Through his spokesman, Jaffe has said he "had absolutely no knowledge of the fraud and like so many others is a victim of these tragic events."

(Reporting by Svea Herbst-Bayliss, editing by Gerald E. McCormick)