06.30.09
Posted in business, hot news, money, news, world of money tagged business, campaign, life, money, newsreports at 11:23 pm by carydalton
LOS ANGELES – The Securities and Exchange Commission is seeking to permanently freeze the assets of a California financier accused of bilking investors until his fraud trial is over.
Judge Philip S. Gutierrez said Monday he would rule next week on the assets of Danny Pang, who is accused of bilking investors in his Private Equity Management Group companies.
Gutierrez temporarily froze Pang’s assets in April, when he also ordered the financier to repatriate any assets sent overseas and turn over his passports.
Investigators say Pang falsely portrayed returns as coming from investments in timeshare real estate and life insurance policies of seniors.
Pang has denied wrongdoing through his attorneys.
SEC wants financier’s assets frozen before trial
Hot News: Economic Report: U.S. home prices down in April: Case-Shiller
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Posted in All, Free blog Tips, money, shortly, world of money tagged campaign, financial, personal, reviews, writing at 8:36 am by carydalton
LONDON (MarketWatch) - European shares traded flat on the last day of a strong second quarter, with gains in the banking sector offsetting losses for food producers.
The pan-European Dow Jones Stoxx 600 index traded flat at 208.03.
The index is showing a gain of just over 18% for the quarter, and a 5.4% rise year-to-date, according to data compiled by FactSet.
The advance was made as sentiment toward the economy improved and as hopes were raised that the worst of the credit crunch is over. Banks were the best performers, up over 45% during the quarter.
That trend was intact early on Tuesday as Barclays shares gained 2.9% to 288 pence. Deutsche Bank lifted the U.K. lender’s price target to 365 pence from 220 pence, citing current profitability plus cheap exposure to a cyclical recovery.
In addition, data showed that U.K. house prices edged up 0.9% in June, the Nationwide Building Society said, bringing the annual rate of decline down to 9.3%, from 11.3% in May.
Regional equity markets weren’t performing as well as the Stoxx 600 index, with the German DAX index down 0.2% at 4,877.91, the French CAC-40 index down 0.2% at 3,186.41 and the U.K. FTSE 100 index down 0.5% at 4,274.37.
U.S. futures were steady on Tuesday. Asian shares were mixed.
Defensive drugmakers, which have underperformed with a gain of 4.9% for the quarter, were higher on Tuesday. Shares of Sanofi-Aventis took back some of last week’s steep losses with a 1.1% gain. Sanofi’s losses have been tied to safety concerns over a diabetes drug.
Still, food-sector companies and retailers were weak on Tuesday, with Unilever shares down 2.3% and supermarket firm Carrefour shares down 2.6%.
Carrefour is holding an investor presentation outlining how it intends to promote a low-cost image.
Bankrupt retailer Arcandor climbed 4.8% as its mail-order unit Quelle received a government loan.
Shares of Airbus owner EADS shares fell 1.5%.
A Yemeni airliner with 153 people on board has crashed in the Indian Ocean, according to news reports. It’s the second major accident involving an Airbus plane this month, following the loss of an Air France Airbus A330 on June 1 with 228 people on board.
Europe Markets: Europe shares lackluster at end of strong quarter
Hot News: Breakingviews.com: Icelands Program For a Fiscal Cure
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06.29.09
Posted in Free blog Tips, money, news, shortly, top tagged All, blogs, economics, financial, opinion at 5:30 pm by carydalton
SAN FRANCISCO (Reuters) – Apple Inc Chief Executive Steve Jobs is back to work following a near six-month medical leave, the company said on Monday.
"Steve is back to work," a company spokesman said. "He's currently at Apple a few days a week, and working from home the remaining days. We are very glad to have him back."
In January, after initially blaming his noticeable weight loss on a hormone imbalance, Jobs announced he was taking a temporary leave of absence, saying his health-related issues were "more complex" than he had originally thought.
Jobs, 54, was treated for a rare form of pancreatic cancer in 2004.
He underwent a liver transplant in Memphis, Tennessee, while on leave. Although the hospital did not provide further details of his condition, it said he "is now recovering well and has an excellent prognosis.
Shares of Cupertino, California-based Apple did not immediately react to the news. They were up 62 cents at $143.06 in Nasdaq trading.
(Reporting by Gabriel Madway, editing by Tiffany Wu and Derek Caney.)
Apple says CEO Steve Jobs back at work
Hot News: Oil and economy optimism lift stocks
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Posted in Free blog Tips, business, economic, online, world of money tagged blogs, financial, people, personal, writing at 2:17 am by carydalton
BEIJING, June 28 (Xinhua) — A Chinese mainland official said here Sunday that the mainland is willing to join hands with Taiwan to get over difficulties at a time when the impact of the global financial crisis still persists.
Zheng Lizhong, executive deputy director of the State Council Taiwan Affairs Office, made the remarks during a meeting with heads of the delegations of Taichung City and Taichung, Changhua and Nantou counties of Taiwan.
The delegations on Sunday concluded a two-day exhibition of farm produce and tourist attractions from these four areas of central Taiwan.
Zheng said the Taiwan farm produce show was an exhibition which “complied with the people’s will.”
The peaceful development of mainland-Taiwan relations should rely on the joint efforts from people on both sides, and the fruits brought about by the improved relations should be enjoyed by people across the Taiwan Straits, Zheng said.
He said people on the mainland are willing to join hands with Taiwan compatriots and together get over difficulties at a time when the impact of the global financial crisis still persists.
Through the joint efforts of people on both sides, cross-Straits relations have stepped into a track of peaceful development, creating favorable conditions for promoting cross-Straits exchange and cooperation, he said.
The officials from Taiwan thanked the State Council Taiwan Affairs Office and relevant departments for organizing and hosting the show, saying they are looking forward to further pragmatic cooperation between the mainland and Taiwan.
During the two-day exhibition, all the Taiwan farm produce were purchased by mainland buyers, with a total trade volume of nearly 700,000 yuan (about 10,200 U.S. dollars). Beijing companies buy Taiwan farm produce at exhibit for 700,000 yuan BEIJING, June 28 (Xinhua) — A group of 29 Beijing companies bought up all the farm produce on offer from central Taiwan at an exhibit Sunday, valued at 700,000 yuan (102,447 U.S. dollars). The companies, including supermarkets, chain restaurants and online sellers, also agreed with the exhibitors to hold Taiwan fruit festivals, tea sales and food festivals in Beijing. Full story
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06.27.09
Posted in business, hot news, online, shortly, top tagged business, campaign, economics, opinion, reviews at 8:36 pm by carydalton
In the world of derivatives, profits for the dealers come from complexity and secrecy.
As a new regulatory system for derivatives is shaped on Capitol Hill, the banks will try to preserve as much of both as they can. To the extent they succeed, it will be the customers, and the financial system, that are at risk.
Already the banks seem to be winning one important battle, that of explaining why derivatives exist.
In Congressional testimony this week, Mary Schapiro, the chairman of the Securities and Exchange Commission, and Gary Gensler, the chairman of the Commodity Futures Trading Commission, laid out the case for extensive regulation. But they also had kind words for the products. Derivatives, Ms. Schapiro said, “allow parties to hedge and manage risk, which itself can promote capital formation.”
For some derivatives, that is true. But the generalization is not always accurate, and there needs to be consideration as to whether some derivatives deserve to exist at all.
“Simply put,” said Richard Bookstaber, one of the pioneers of financial engineering on Wall Street, “derivatives are the weapon of choice for gaming the system.”
Mr. Bookstaber wrote one of the best books about the causes of the financial crisis, “A Demon of Our Own Design,” and did so before the crisis erupted. This month, his testimony to a Senate subcommittee provided a stark lesson in the uses to which derivatives have been put.
“Derivatives,” he testified, “provide a means for obtaining a leveraged position without explicit financing or capital outlay and for taking risk off-balance sheet, where it is not as readily observed and monitored.” They let institutions dodge taxes and accounting rules.
“Viewed in an uncharitable light,” he added, “derivatives and swaps can be thought of as vehicles for gambling; they are, after all, side bets on the market.”
And they were side bets that could destabilize the markets. Had American International Group been gambling in regulated markets, it would have been required to put up collateral when prices began to go against it. Instead, it was able to ignore the problem until its own collapse — and perhaps that of the financial system — was imminent.
Even when derivatives do allow financial risks to be transferred, that is not always a good thing. John Kay, a leading Scottish economist, noted recently that he used to teach — along with most other economics professors — that derivatives allowed risks to be transferred to those better able to bear them.
But, he added, experience had shown that to be wrong. Now, he said, he teaches that derivatives allow risk to be shifted from those who understand it a little to those who do not understand it at all. That is not a bad description of how the risks of bad mortgage loans were transferred from those who made the loans to those who bought troubled collateralized debt obligations.
We would be much better off as a society if that particular transfer of risk had been regulated, or even prevented. At a minimum, there should have been a lot more disclosure about just what was going on.
The Obama administration’s outline for bringing the derivative markets under regulation addresses all the important issues. But the details, to be worked out in legislation and later in regulations, will be critical. Wall Street will try to keep as much of the market as possible from moving to exchanges, where prices would be transparent and those taking risks would have to put up collateral immediately when prices moved against them.
Instead, the derivatives industry has already started a public relations campaign claiming that it is helping businesses, particularly small ones, hedge their risks by devising custom derivatives and not requiring the customers to post liquid assets when they begin to lose money. They argue that forcing companies to put up cash when they gamble would take money away from the companies’ productive investments, and thus damage the economy.
It would also mean that those gambles could not destroy the companies making them. All too often, Wall Street has come up with complicated vehicles with little upfront costs but huge potential risks, and made lots of money on them from customers who are in no position to assess the fair value of the derivative or to bear the losses if the risks materialize.
The Obama administration has embraced the principle that complicated, illiquid derivatives should require higher margins from customers. If there is to be effective regulation, it is critical that the administration prevail on that issue.
It is also important that as much derivative trading as possible be pushed into standardized, exchange-traded contracts. The customers should be demanding that, simply because it would reduce their transaction costs, but many have been persuaded by the claim that customized products serve their needs better.
And sometimes the customers like the complexity. It makes it easier to hide the risks and leverage they are taking, as well as the noneconomic objectives — such as evading regulations — that they may prefer not be noticed by authorities.
Given the overlaps of the derivatives, commodities and securities markets, nearly everyone who has studied the issue thinks it would make sense to merge the S.E.C. and the C.F.T.C. But the agencies are overseen by differing Congressional committees that wish to retain their influence, and the campaign contributions that influence attracts. The administration evidently decided that was not a fight worth making.
Instead, Ms. Schapiro and Mr. Gensler hammered out a general agreement on which agency should regulate which product. It’s not perfect, but it could work, particularly if the regulators hire people, such as Mr. Bookstaber, who understand how the games are played.
There could even be an advantage for the public in multiple regulators. Back in the Clinton administration, when Wall Street was persuading Congress to allow derivatives to escape nearly all oversight, the chairman of the C.F.T.C., Brooksley Born, sounded the warning about the risks of that course. She lost. Had she prevailed, the financial disaster might not have happened.
In the future, it is at least possible that if one agency is effectively taken over by those it regulates, the other might be able to protest and get public attention.
Despite the clear evidence that Warren Buffett was right when he called derivatives “financial weapons of mass destruction,” there has been little talk of giving regulators authority to ban some derivatives.
Perhaps, however, the Obama administration has that idea up its sleeve. Its white paper on financial regulation calls for authority to prevent “market manipulation, fraud, and other market abuses.” My efforts to find out just what is included in that last catch-all category were not successful.
When the derivatives industry was persuading Washington to let it alone, one argument was that any American rules would just drive business overseas, hurting American competitiveness. That argument will be heard again, and makes it necessary that there be international regulatory cooperation. But the fact that some market allows something is not enough to prove everyone should allow it.
For far too long, Wall Street was allowed to play as it wished. It is a major understatement to say that privilege was abused. The details of derivatives regulation adopted this year will go a long way to determining whether and when the next financial crisis will engulf the world.
Floyd Norris comments on finance and economics in his blog at nytimes.com/norris.
High & Low Finance: The Challenge of Regulating Derivatives
Hot News: Fiat open to retail and/or institutional bond: report
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Posted in All, Free blog Tips, money, news, top tagged economy, newsreports, people, personal, political at 5:18 am by carydalton
HOUSTON (Reuters) – A U.S. judge on Thursday set bond for accused swindler Allen Stanford's release at $500,000.
The bail payment set by U.S. Magistrate Judge Frances Stacy includes a $100,000 cash deposit, and requires Stanford to wear a global satellite tracking device.
(Reporting by Anna Driver and Eileen O'Grady; Editing by Phil Berlowitz)
U.S. judge sets Allen Stanford’s bail at $500,000
Hot News: Times Co. May Include 2nd Paper in Globe Sale
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06.26.09
Posted in .com, All, hot news, money, world of money tagged events, finance, money, people, writing at 2:24 pm by carydalton
HONG KONG — Qantas Airways of Australia said Friday that it would scrap or defer orders for 30 of Boeing’s new 787 Dreamliner aircraft, dealing a heavy blow to the American manufacturer and highlighting the intense pressure for cost savings at airlines around the world as the industry struggles to adjust to a sharp drop in passengers and freight.
Qantas, still the largest customer of the long-range, wide-body Dreamliner aircraft that is considered the key to Boeing’s future, is canceling orders for 15 of the 787s, in a move that it said would save the airline $3 billion. It is delaying delivery of 15 others by four years.
Alan Joyce, chief executive of the airline, said in a statement that Qantas’ decision was not linked to news Tuesday that the Boeing 787’s first flight had been delayed to allow further minor modifications to be made to what has been touted as the world’s most sophisticated plane.
Those problems were the latest in a series of delays in the Dreamliner project and ignited concerns about the possible effect on initial delivery schedules. The first delivery, to All Nippon Airways, was scheduled for the first quarter of 2010.
Qantas said it would retain orders for 50 of the new aircraft, including 15 for its low-cost subsidiary, Jetstar. A spokesman for Qantas, Simon Rushton, declined to comment on whether the airline would pay a penalty for the cancellation.
Analysts said the Australian flag carrier’s cancellation was one of the most significant such announcements to date, even in an industry that has already undergone major cost cuts and shake-ups.
“For Qantas to pull or defer deliveries is a major, major step,” said Derek Sadubin, an analyst at the Center for Asia Pacific Aviation, a consulting company in Sydney.
The Qantas decision takes the number of cancellations for the 787 from airlines around the world so far this year to 73, or about 8 percent of total orders for the aircraft, Mr. Sadubin said, adding that more cancellations — of aircraft of all types and makes — are probable.
Mr. Joyce, said, “Qantas announced its original B787 order in December 2005, and the operating environment for the world’s airlines has clearly changed dramatically since then.”
The global economic turmoil has taken a heavy toll on passenger and cargo traffic, with the latest figures from the International Air Transport Association showing passenger numbers in May were 9.3 percent below numbers from a year earlier, and freight demand was down 17.4 percent.
Falling volumes, combined with soaring oil prices last year, forced airlines around the world to reduce staff and flights, park planes and shelve investment plans, including aircraft orders.
Like many of its rivals, Qantas expects sharply reduced profits this year. In April, it announced it would shed 1,750 jobs, in addition to 1,500 job cuts announced last year, and warned it was exploring ways to reduce the number of aircraft it was to receive from Boeing.
“Qantas, like most airlines around the world, is clearly in survival mode,” Mr. Sadubin said.
“We are working Qantas to make changes appropriate to the current climate,” Jim Proulx, a Boeing spokesman in Seattle, told Bloomberg News.
In Blow to Boeing, Qantas Drops Order
Hot News: The Work-Up: Recession’s Children
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06.25.09
Posted in economic, hot news, money, shortly, world of money tagged marketing, news, personal, work, world at 11:41 pm by carydalton
Don’t miss these top money and investing columns:
Investors to funds: See you in court
ETFs go after hedge funds
Secrets of a market expert
Investors can’t control the market’s performance, but they do have a say about how much they spend on mutual funds. And when it comes to fees and expenses, they increasingly have an influential ally: the U.S. government.
Securities regulators are advocating that shareholders be given more ammunition to sue fund companies over expenses. Meanwhile, federal lawmakers are pushing for clearer disclosure of the charges investors pay for 401(k) retirement accounts. And just last week, the Securities and Exchange Commission and the Department of Labor held a hearing on the viability of target-date funds as default options in company-sponsored retirement plans.
Expect the government to dig into other corners of the investment business in an effort to put individual shareholders on a level playing field. Regulation is no longer a four-letter word in Washington — indeed, after the devastating credit crisis, a crippling recession and the wealth-eroding bear market, regulation is a watchword.
INDUSTRY SPOTLIGHT: RULES AND REGULATORS U.S. shoots down courts in fund-fee case
The U.S. government has waded into a case that could determine the future of mutual-fund fees, and told the Supreme Court that it believes a lower court went too far in restricting investors’ ability to successfully sue their funds for charging too much. See FundWatch.
SEC outlines money-market fund changes
The Securities and Exchange Commission revealed its plan for new regulations governing the $3.5 trillion money-market mutual fund industry, but backed off a controversial proposal to require the funds to float their share prices. See full story.
Lawmakers push 401(k) fee disclosure
A House panel approved a bill that would require easily understandable fee disclosures for all 401(k) retirement accounts and would require that plans offer the option of an index-based investment. See full story.
SPECIAL FOCUS: HEDGE FUNDS Hedge fund, alternative managers say markets outlook still dim
If hedge fund managers have any insight at all, the credit crunch and market turmoil may not be over yet. See Global Investor.
Indexed ETFs geared to copy hedge-fund performance
Hedge funds have been shaken by poor returns and the Madoff scandal, but that hasn’t stopped exchange-traded funds from launching portfolios designed to capture the risk and return characteristics of hedge funds. See ETF Investing.
Van Eck starts mutual fund that invests in hedge funds
Van Eck Global said Tuesday it’s launching a new mutual fund that invests in hedge funds, the latest sign the mutual fund industry is expanding its offerings of alternative investments in the wake of the financial crisis. See full story.
Fund manager sees upside in financials, transportation, agricultural products
Fearful about where the U.S. stock market is headed? Mutual-fund manager Michael Cuggino isn’t. See The Stockpickers.
COMMENTARY Market veteran Bill O’Neil shares his investing secrets
Many market observers talk about how the rules of investing have changed in the past few years. Bill O’Neil says nothing has changed at all. See Chuck Jaffe.
Funds forgotten in overhaul
For mutual fund investors, the appropriate reaction to President Barack Obama’s plan to overhaul the financial system can be summed up in three words: Thanks for nothing. See full story.
Stupid Investment of the Week
Near the year’s half-way mark, the market’s three-month rally has resulted in something of a slump for a guy picking stupid investments, the same way that the market’s slump in 2008 made it a banner year for bad actors.
Mutual Funds: Fund investors’ best friends: Rules and regulators
Hot News: Smugglers in the Alps, Carrying Billions in (Fake) Bonds
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Posted in .com, hot news, news, top, world of money tagged campaign, economy, newsreports, politics, work at 8:12 am by carydalton
Filed at 2:36 a.m. ET
LONDON (Reuters) - Ericsson <ERICb.ST> Chief Executive Carl-Henric Svanberg is stepping down to become Chairman of BP Plc <BP.L> in a surprise appointment that ends the oil major’s lengthy search for a new chairman.
Ericsson said it had appointed its current Chief Financial Officer, Hans Vestberg, to replace Svanberg as President and CEO.
Svanberg will step down at Ericsson at the end of the year and take over from Peter Sutherland at BP in January 2010.
“Everyone had been waiting for something to happen, that is that Carl-Henric would step down,” Nordea analyst Mats Bergstrom said.
“That Hans Vestberg is chosen indicates that the board feels the business is moving along well, and investors will appreciate this, feeling that he has a good grip of the numbers.”
But a dealer said Svanberg’s move follows investor dissatisfaction with management at the telecoms equipment maker.
The surprise appointment ends a fraught recruitment process at BP. Sutherland had expected to stand down late last year or earlier this year.
BP initially selected miner Rio Tinto’s <RIO.AX> then chairman Paul Skinner, a former Royal Dutch Shell Plc <RDSa.L> executive, to fill the job.
However, Skinner withdrew following investor unease over Rio’s plan to sell $19.5 billion in assets and bonds to Chinese state-owned aluminum group Chinalco, BP sources said.
Skinner stepped down from his Rio role in March and earlier this month, Rio dropped the Chinalco deal.
The failed Skinner appointment poisoned the role for some potential candidates, especially UK businessmen, some executives said.
BP had hoped to select someone with oil industry experience, sources close to the process said, but the Skinner debacle limited its options.
Svanberg will join the BP board in September and, once he becomes Chairman, will be based in London and devote the majority of his time to BP business, BP said.
Svanberg will remain a member of the Ericsson Board of Directors, Ericsson said.
(Additional reporting by Mia Shanley in Stockholm)
(editing by Will Waterman, John Stonestreet)
BP Selects Ericsson Chief as Next Chairman
Hot News: Japanese Banks Discuss a Merger
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06.24.09
Posted in All, Free blog Tips, economic, money, shortly tagged events, markets, people, personal, political at 5:42 pm by carydalton
WASHINGTON (MarketWatch) - The U.S. financial system remains vulnerable with unemployment rising, house prices falling and commercial real estate problems continuing to build, a key bank bailout fund overseer said Wednesday.
“This is why we must remain vigilant,” said Herbert Allison, the Treasury’s point man for the $700 billion Troubled Asset Relief Fund, in testimony to the Congressional Oversight Panel. “We must press ahead with our economic recovery efforts.”
Allison, in his first congressional hearing since being confirmed to the position by Congress, said the Treasury’s Capital Purchase Plan has invested nearly $200 billion into 633 financial institutions. Roughly 30 firms have repaid $70 billion in CPP investments, he added. It is unclear whether Allison will seek to make further capital injections into financial institutions.
However, Allison also pointed out that there are some signs that the economy is improving.
“Consumer confidence rose to its highest level in eight months in May,” Allison said. “Housing starts rose at an annual rate of 17% in May, and house purchases have begun to pick up in some parts of the country.”
Allison was appointed by the Obama administration to be a Treasury Department Assistant Secretary. Before joining the Treasury Department, Allison headed the government’s conservatorship of Fannie Mae. The U.S. government took control of Fannie Mae and another government-sponsored-entity in September in an arrangement that is like bankruptcy protection with the government guaranteeing the debt of the two companies and operating them.
Prior to that, Allison was chairman and CEO of public pension fund TIAA-CREF.
Allison: U.S. financial system remains vulnerable
Hot News: Capitol Report: Congress played key role in Obama bank proposal
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Posted in business, economic, hot news, money, top tagged All, blogs, events, newsreports, reviews at 2:17 am by carydalton
Three lawsuits filed on Monday provided new details about what regulators say went on inside Bernard L. Madoff’s long-running Ponzi scheme, including information about who might have helped perpetuate the fraud for so long.
No one but Mr. Madoff and his accountant have faced criminal charges so far. But in two civil fraud cases filed Monday, federal regulators contend that a prominent investor and a small brokerage firm both helped Mr. Madoff sustain the Ponzi scheme by steering billions of dollars into it, in exchange for hundreds of millions of dollars in fees and profits.
Taken together, the new lawsuits expand on what regulators have previously disclosed about Mr. Madoff’s swindle, which wiped out customer account balances totaling almost $65 billion.
In one lawsuit, the Securities and Exchange Commission filed civil fraud charges against Stanley Chais, a prominent California money manager and one of Mr. Madoff’s earliest investors, with accounts dating to 1970.
The lawsuit accused Mr. Chais of deceiving his clients and ignoring obvious signs of fraud.
Some of those signals, regulators say, included Mr. Madoff’s ability to comply with a request from Mr. Chais that none of the Chais accounts should ever report a single losing trade. The second civil fraud case, also filed by the S.E.C., contended that three senior executives at the Cohmad Securities Corporation, a small brokerage firm co-founded by Mr. Madoff, knowingly helped finance the Ponzi scheme and conceal it from regulators for years.
The third suit, filed in federal bankruptcy court by the trustee seeking assets for Madoff victims, also named Cohmad and its three senior executives, along with more than a dozen of its current or former employees. It seeks to recover millions of dollars in fees and profits the defendants received from Mr. Madoff over the years.
Cohmad, which rented space in Mr. Madoff’s Manhattan offices, was little more than a stealth marketing arm that allowed Mr. Madoff to maintain his aura of exclusivity, the S.E.C. contended.
In each case, the defendants deny that they knew about Mr. Madoff’s fraud. They also emphasized that they, like other Madoff victims, lost enormous sums of money when the scheme collapsed with Mr. Madoff’s arrest in December.
For the most part, the S.E.C. case mirrors accusations in a lawsuit the Madoff trustee, Irving H. Picard, filed against Mr. Chais last month. However, it adds the claim that Mr. Chais demanded that Mr. Madoff never incur losses in his accounts.
Eugene R. Licker of Loeb & Loeb, a lawyer for Mr. Chais, denied the S.E.C. accusations. “Like so many others, Mr. Chais was blindsided and victimized by Bernard Madoff’s unprecedented and pervasive fraud,” Mr. Licker said in a statement. “Mr. Chais and his family have lost virtually everything — an impossible result were he involved in the underlying fraud.”
He added that his client “has faith that the judicial system will allow him to fight these reckless charges and restore his hard-earned good name.”
The Cohmad executives named in the suits were Maurice J. Cohn, its co-founder and chairman; his daughter Marcia Beth Cohn, its president and chief operating officer; and Robert M. Jaffe, its vice president. The two new lawsuits against Cohmad and the executives included new accusations about the firm’s role in the fraud.
Both lawsuits asserted that Mr. Madoff paid fees to Cohmad executives and brokers based on the amount of cash they steered into his hands. But according to the lawsuits, those fees were based on records that showed only the actual cash status of customer accounts — the amounts of cash invested and withdrawn — without including the fictional profits shown in the statements provided to customers.
When a customer’s withdrawals exceeded the cash invested, Cohmad’s employees no longer earned fees on that account, even though the customer’s statements still showed a substantial balance, according to the suits.
This unusual arrangement indicated that Cohmad and its representatives knew that the profits that investors were supposedly earning were bogus, according to the trustee’s lawsuit complaint.
The S.E.C. complaint also asserted that Mr. Jaffe — who is the son-in-law of Carl Shapiro, a philanthropist whose family reported losing hundreds of millions in the scheme — personally brought more than $1 billion into Mr. Madoff’s investment business.
According to regulators, Mr. Jaffe was rewarded with outsize profits of more than 40 percent in his personal Madoff accounts. Some of those profits were generated after the fact to comply with Mr. Jaffe’s requests for specific long-term gains on particular days, the lawsuits contend.
Mr. Jaffe “knew or recklessly disregarded” that these trades were fictitious and continued to raise cash for Mr. Madoff from other investors, according to the S.E.C. complaint.
Steven R. Paradise of Vinson & Elkins, representing Cohmad and the Cohn family, denied any link between his clients and Mr. Madoff’s fraud.
“Our clients continue to be as shocked as anyone at the revelations” about Mr. Madoff, Mr. Paradise said. “We look forward to the opportunity to challenge both the S.E.C.’s and Mr. Picard’s allegations in court.”
Mr. Jaffe’s lawyers, led by Stanley S. Arkin, released a statement saying that the S.E.C. complaint “smacks of impulsiveness and efforts at self-justification. It is unfair, baseless in the law, and is inaccurate in its understanding of the facts and of Mr. Jaffe.”
Although Cohmad’s offices were on the 18th floor of the three-floor suite that housed Mr. Madoff’s business, Ms. Cohn also had a key card for the 17th floor, where the fraudulent investment management operations was located, and records show that she used it regularly, according to the trustee’s lawsuit.
Exhibits filed with the trustee’s case showed that someone had used Ms. Cohn’s card to enter that area more than five dozen times during 2008, including two occasions on the morning of Dec. 11, the day Mr. Madoff was arrested.
According to the trustee’s lawsuit, all the individual Cohmad defendants “knew or had access to facts” that raised serious doubts about the legitimacy of that money management business and “had strong financial incentives to participate in, to perpetuate and to keep quiet about Madoff’s fraudulent scheme.”
4 People and Firm Sued in Madoff Case
Hot News: FundWatch: Regulator to lay out money-market fund plans
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06.23.09
Posted in business, economic, hot news, top, world of money tagged markets, opinion, people, personal, work at 11:24 am by carydalton
PARIS — European stocks were little changed Tuesday, but Asian markets followed Wall Street
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06.22.09
Posted in .com, hot news, money, top, world of money tagged business, news, opinion, people, world at 8:23 pm by carydalton
In India, stalled monsoon rains are expected to revive soon. But there are concerns the shortfall in monsoon rains so far could adversely impact crop production. Indian women harvest tea leaves at a plantation in Kondoli, some 17 km from Nagaon in the northeastern state of Assam, 19 June 2009The Indian Meteorological Department says monsoon rains could hit several states along the western and eastern coast over the next two to three days.The monsoon rains arrived at the end of May as scheduled, but then slowed down. The weather department says rainfall in the first three weeks of June was 45 percent below normal.The dry spell in June has worried millions of farmers in the country waiting to sow crops such as rice, and raised fears that food production, which is critically dependent on copious monsoon rains, could suffer this year.Agriculture expert, Devender Sharma, says concerns about the deficient rains are running high in those parts of the country that have no access to modern irrigation systems. ”The most important areas which will face the crisis would be of course the dryland regions of India, which produces about 45 percent of total food requirement of the country,” said Sharma. “Most of these are of course the crops which anything can go wrong, a few weeks or four weeks of delay of rainfall would mean a complete debacle.” Sharma says the next two weeks could be critical in determining whether the production of such crops as rice, oilseeds, cotton and corn will be impacted adversely. The federal government says it is preparing to provide drought resistant varieties of seeds to regions that are dependent on the monsoons. And it has convened a meeting later in the week of farm officials from states that could be hit hard such as Uttar Pradesh, Orissa, Maharashtra and Andhra Pradesh. The government monitors food grain production carefully to ensure that there is enough to meet the requirements of its one billion people. India is the world’s second highest producer of rice and wheat. Agriculture plays a crucial part in the Indian economy sustaining the livelihoods of nearly two-thirds of the country, or 600 million people. Although the farm sector contributes only 20 percent to the country’s gross domestic product, good rains ensure higher incomes in the vast rural areas, and fuel demand for domestic products ranging from mobile phones to tractors.The monsoons may also be crucial in ensuring the Indian economy, which is showing signs of emerging from the global recession, stays on the path of revival.
Deficient Rains in India Raise Worries About Farm Production
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