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Bernard Madoff assures that regulatory authorities and banks knew pretty well about his manipulations: suspicious transactions could have been easily traced with his accounts. That’s what he told in his interview to Financial Times. Serious troubles await JP Morgan, HSBC and UBS – promised the creator of the largest Ponzi scheme in modern history.
Liability for creation of the Ponzi scheme should be shared among banks, regulators and separate financial institutions – Madoff shared his ideas with FT. He was interviewed in a jail, sitting his 150-year sentence.
For almost 20 years of existence of his fund - Madoff Investment Securities – he managed to attract $64.8 billion, promising his clients high interest income. The scheme collapsed during the crisis when Madoff’s clients almost simultaneously decided to withdraw $7 billion. He was arrested in December 2008, and three months later he admitted that he had been lying to investors and regulators for almost two decades by presenting faked accounts on transactions with shares of large companies of the S&P 500 index while in reality, there were no such deals. Madoff just transferred money to his account and paid profits on demand out of it.
3 million people fell victims of this scheme – not only celebrities and rich, but large banks as well. Bernard Medoff doesn’t see banks as innocent ones who suffered for nothing. “I am not a banker but I know that $100 billion going in and out of a bank account is something that should alert you to something”, – he said.
All of his accounts were in JP Morgan. “JPMorgan got all the financial statements”, - he confirmed.
In February 2010 JP Morgan was sued by Irving Pickard who was in charge of liquidation of Madoff`s assets and returning money to former customers. Pickard blamed the bank, arguing that it had purposefully left the fraud without notice, thus becoming the participant of the criminal scheme. JP Morgan denies its guilt, saying that they followed all the laws and procedures to manage their client accounts. However, Madoff is pretty sure that the bank has very few chances of not returning money to clients. He also promises serious problems to HSBC and USB which were also sued by Pickard for $9 billion and $2 billion, respectively. Those two also deny their guilt.
Regulators should have knows as well, says Madoff: they had enough information to check suspicious transactions.
He also sees his very first partners as full participants of the Ponzi scheme he created because they were actively helping him to attract new clients at the end of 1980-es. Those are Jeffrey Pickower, Norman Levy, Stanley Chais and Carl Shapiro. Pickard sued those people as well, demanding to return money. Pickower’s widow (who passed away in 2009) already agreed to return $7.2 billion. Levy’s family (he died in 2005) agreed to return $220 million. Shapiro is still alive and is ready to compensate $625 million. Chais died, but no agreement has been reached yet with his relatives.
Madoff does not deny his own guilt and admits that he indeed lied to investors and regulators for 16 years. It really hurts him to hear about his family because of his wife Ruth being under pressure and his elder son’s suicide in December 2009.
Source: GAAP.ru
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