Madoff in court as Wall Street fraud shakes world financeThe US finance watchdog expressed concern at how repeated warnings about Bernard Madoff were ignored, ahead of the Wall Street investment baron's first court appearance Wednesday over a 50-billion-dollar fraud.
Securities and Exchange Commission (SEC) chairman Christopher Cox said he was "gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations" against Madoff.
As banks and investment funds Noun 1. investment funds - money that is invested with an expectation of profit
assets - anything of material value or usefulness that is owned by a person or company around the world counted the cost of their links to Madoff, the 70-year-old former head of Nasdaq scrambled to avoid jail before his first court appearance since his arrest last Thursday.
Currently free on a 10-million-dollar bond, Madoff is due in a Manhattan court at 2:00 pm (1900 GMT (Greenwich Mean Time) See UTC.
GMT - Universal Time 1 ) to establish whether he has met bail conditions that include having to surrender his passport.
Madoff had been due to appear in court Tuesday but requested an additional day to fulfill bail conditions, the federal prosecutor said in a letter to the court.
The bond, secured by Madoff's seven-million-dollar Manhattan apartment, must be signed by three more guarantors after his wife, who signed following his arrest.
If unable to secure guarantors by Wednesday afternoon, prosecutors may seek to have the investment baron jailed, pending trial.
US authorities allege Madoff used money from new investors to pay interest to other investors, in a fraud scheme known as a Ponzi pyramid. Madoff has allegedly confessed to the scam, which collapsed after clients demanded their money back as the global financial crisis hit.
The SEC chairman announced a probe late Tuesday into how the financial regulatory body failed to detect the scheme.
Cox said the SEC "has learned that credible and specific allegations regarding Mr. f's financial wrongdoing wrong·do·er
One who does wrong, especially morally or ethically.
wrongdo , going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the commission for action."
Cox said he has "directed a full and immediate review of the past allegations regarding Mr. Madoff and his firm and the reasons they were not found credible, to be led by the SEC's Inspector General."
The SEC probe will also "include all staff contact and relationships with the Madoff family and firm, and their impact, if any, on decisions by staff regarding the firm," Cox said.
There has been international criticism of US regulators over the case from finance professionals.
Jean-Pierre Jouyet Jean-Pierre Jouyet (born February 13, 1954) is a French politician. After having graduated from the prestigious Institute for Political Science (Institut d'études politiques, IEP, otherwise known as Sciences Po), and later from Ecole Nationale d'Administration (ENA), he worked , France's former European affairs minister who this week took over at France's financial markets watchdog, the AMF AMF ACE (Allied Command, Europe) Mobile Force
AMF Autorité des Marchés Financiers (French)
AMF Action Message Format
AMF Arab Monetary Fund
AMF Asian Monetary Fund
AMF Autocrine Motility Factor , said: "For the fourth time, American regulation is in question."
He cited three previous crises: the 1998 collapse of US hedge fund hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" managers LTCM LTCM Long Term Capital Management ; the 2001 false-accounting scandal involving energy giant Enron; and the collapse in September of the Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. bank.
But attacks have also been directed at the professionals who invested with Madoff without making sufficient checks.
British investment consultants PIRC PIRC Parent Information and Resource Center
PIRC Per Interface Rate Control (Cisco)
PIRC Parkside International Residential College (University of Southern California)
PIRC Program to Improve Reserve Components questioned "what financial institutions actually do for their management fee if being able to spot, and avoid, a pyramid scheme Pyramid Scheme
An illegal investment scam based on a hierarchical setup that relies on new recruits' funding as the source of money, or so-called returns, to be provided to those earlier investors/recruits above them in the pyramid. isn't part of the service?"
Big banks and funds around the world, already licking wounds from the financial crisis, have reported huge losses from exposure to Madoff Investment Securities.
Spain's biggest bank Santander announced potential losses of more than three billion dollars (2.19 billion euros) and the country's stock market regulator said Spanish investment funds had direct exposure of 106.9 million euros (147 million dollars).
Private Austrian bank Medici Medici, Italian family
Medici (mĕ`dĭchē, Ital. mā`dēchē), Italian family that directed the destinies of Florence from the 15th cent. until 1737. said it had exposure of 2.1 billion dollars (1.5 billion euros) via two of its investment funds, but that the exposure did not threaten its survival.
Dutch bank Fortis announced exposure of at least 1.2 billion dollars and Britain's HSBC HSBC Hongkong and Shanghai Banking Corporation
HSBC Humane Society of Broward County (Florida)
HSBC Humane Society of Bay County (Bay County, Michigan) at 1.0 billion dollars.
Italian bank UBI Banca estimated its exposure totalled slightly more than 84 million dollars (60 million euros). Other European banks have announced exposure of hundreds of millions of dollars.
In Japan, Aozora Bank said its exposure might amount to 12.4 billion yen (137 million dollars).
Even the charitable Wunderkinder Foundation of Oscar-winning filmmaker fell victim to the mammoth fraud, with about 70 percent of the dividend income and interest for the foundation handled by Madoff's securities firm, according to The Wall Street Journal.