Sarian sex chats
A lawsuit filed by the State of Massachusetts against “feeder” fund Fairfield Greenwich makes it clear (by supplying copious transcripts of phone conversations, etc.) that Fairfield had more than an inkling of what was going on in Madoff’s shop.And on June 22, 2009, the Securities and Exchange Commission charged several Madoff “feeders” with securities fraud related to their participation in the Madoff Ponzi.I can think of only three reasons for his doing so: The authorities have been rather slow to provide details of Madoff’s fraud, but there is other evidence to consider.For example, Madoff’s secretary recently wrote in Vanity Fair magazine that Madoff’s stock loan operations (the division of his brokerage responsible for locating and borrowing shares to be sold short – or, more likely, responsible for floor of the Lipstick building.After all, remember, the SEC exemption allowed market makers, such as Madoff, to engage in naked short selling.Madoff had a reason for advocating for that exemption.That famous criminal is now a “prominent philanthropist,” too. * * * * * * * * By most accounts, Madoff had just a few key “feeders”– hedge funds and individuals who raised money to “feed” his billion Ponzi scheme.
One would normally expect Madoff’s stock loan operations to be housed in his brokerage.
Where we left off, CNBC’s Jim Cramer had declared Dendreon to be a “battleground stock,” and Dendreon had been attacked by naked short sellers who illegally flooded the market with phantom stock, right at the time when the FDA’s advisory panel delivered the fantastic news that it had voted in favor of approving Dendreon’s prostate cancer treatment.
We had learned that it is impossible to know who was responsible for the phantom stock (the SEC keeps that a big secret), but we do know that, thanks to an SEC loophole, phantom stock was often created by “marrying” a market maker’s naked short sales to put options.
One of those charged was Robert Jaffe, who was also a partner with Madoff in a brokerage called Cohmad Securities.
Earlier in his career, Jaffe was found to be running money for the Anguilo brothers, the Boston dons of the Genovese Mafia family.
We had also learned that in the days after the FDA’s vote, only ten hedge funds on the planet held significant numbers of Dendreon put options (bets against the company).