Big investors may lose in alleged $50B fraud
The list of potential victims in what is said to be a massive Ponzi
scheme run by money manager Bernard Madoff continues to grow.
More Videos
NEW YORK (AP) -- From a Jewish youth charity in Boston to major banks
as far afield as Zurich, the list of investors who say they were
duped in one of Wall Street's biggest Ponzi schemes is growing.
Around the world, investors who sunk cash into veteran Wall Street
money manager Bernard Madoff's investment pool spent the weekend
calculating how much exposure they might have. The 70-year-old
Madoff, well respected in the investment community after serving as
chairman of the Nasdaq Stock Market, was arrested Thursday in what
prosecutors say was a $50 billion scheme to defraud investors.
One thing was clear in the fallout from his arrest: The alleged
victims span from the super rich, to pensioners and powerful
financial institutions, to local charities. Some investors claim
they've been wiped out, while others are still likely to come forward.
"There were a lot of very sophisticated people who were duped, and
that happens a great deal when you've had somebody decide to be
unscrupulous, " said Harvey Pitt, a former chairman of the Securities
and Exchange Commission, a regulator in charge of monitoring
investment funds like the one Madoff operated.
"It isn't just the big investors," he said. "There's a lot of
charitable and foundation money involved in this, which is the real
tragedy."
Charities across the country are expected to be directly affected by
the collapse of Madoff's investment fund. The assets of Bernard L.
Madoff Investment Securities LLC were frozen Friday in a deal with
federal regulators and a receiver was appointed to manage the firm's
financial affairs.
One of the largest financial scams to hit Wall Street has investors
wondering if they'll ever get their money back.
In Boston, the Robert I. Lappin Charitable Foundation, a charity that
financed trips for Jewish youth to Israel, said on its Web site
Sunday that the money for its operations was invested with Madoff.
"The money needed to fund the programs of the Lappin Foundation is
gone," it said. "The foundation staff has been terminated today."
New Jersey Sen. Frank Lautenberg, one of the wealthiest members of
the Senate, entrusted his family's charitable foundation to Madoff.
Lautenberg's attorney, Michael Griffinger, said they weren't yet sure
the extent of the foundation's losses, but that the bulk of its
investments had been handled by Madoff.
Lautenberg's foundation handed out more than $765,000 to at least 100
recipients in 2006, according to the most recent listing on
Guidestar, which tracks charitable organization filings.
The foundation helps support a variety of religious, educational,
civic and arts organizations in New Jersey and elsewhere, and its
contributions range from a gift of than $300,000 to the United Jewish
Communities of MetroWest New Jersey to a $2,000 donation to a
children's program at the Hackensack Medical Center.
Reports from Florida to Minnesota included profiles of ordinary
investors who gave Madoff their money. Some had been friends with him
for decades, others were able to invest because they were a friend of
a friend. They told stories of losing everything from $40,000 to an
entire nest egg worth well over $1 million.
They join a list of more powerful investors that have come forward,
all worried about the extent of their losses. The roster of names
include Philadelphia Eagles owner Norman Braman, New York Mets owner
Fred Wilpon and J. Ezra Merkin, the chairman of GMAC Financial
Services, among others.
Beyond U.S. hedge funds, more corporate names disclosed exposure to
Madoff. Late Sunday, some of Europe's biggest banks acknowledged
they, too, were exposed to Madoff's investment fund.
Switzerland' s Reichmuth & Co. said the private bank has $327 million
at risk. It told investors that they "sincerely regret" being
affected.
French bank BNP Paribas estimated its exposure Madoff's fund could
lead to $467 million in losses.
In a brief statement Sunday, Paribas said it has "no investment of
its own" in Madoff's hedge funds but "does have risk exposure to
these funds through its trading business and collateralized lending
to funds of hedge funds."
Spain's Grupo Santander SA, Europe's second-largest banking
consortium, said its clients had an exposure of $3.1 billion to
Madoff's investment funds, mostly through the Optimal Strategic US
Equity fund, according to reports.
Japan's largest brokerage, Nomura Holdings, said Monday it has about
$306 million, in exposure to the Ponzi scheme.
Berbagi foto Flickr dengan teman di dalam Messenger. Jelajahi Yahoo!
Messenger yang serba baru sekarang! http://id.messenger.yahoo.com
