I heard about this on the news while driving home from work, last night, and was astounded by the amount of money this man was able to swindle people out of. And, we're not talking about your poor suckers that don't know any better. We're talking about people like Kevin Bacon, Kyra Sedgwick, Steven Spielberg, and Henry Kaufman, the former Salomon Brothers economist. This guy swindled billions from them. Wow! Just wow!

The news report I heard (which I haven't, yet, confirmed) said that all Kevin Bacon has left is the money in his checking account and his house.

Madoff complying with assets disclosure deadline

Wed Dec 31, 2008 3:52pm EST

http://www.reuters.com/article/newsOne/idUSTRE4BT51V20081231

By Grant McCool

NEW YORK (Reuters) - Accused swindler Bernard Madoff was complying with a court-ordered deadline to tell U.S. regulators how much money he has left, as lawmakers prepared to take their first close look at the alleged scheme that duped investors worldwide.

A lawyer for the 70-year-old investment adviser, who is under house arrest in his Manhattan apartment and subject to electronic monitoring, said a list of assets, liabilities and property would be sent by the Wednesday deadline to the U.S. Securities and Exchange Commission under a December 18 court order.

"That material will be filed today," said Madoff's attorney, Ira Lee Sorkin. "It will be done pursuant to the court order. It will get there on time."

Sorkin declined further comment, and a spokesman for the SEC declined to comment.

The regulator is not required to immediately publicly file such disclosures with the courts. The information becomes part of an investigation into how Bernard L. Madoff Investment Securities LLC was run and how some $50 billion in losses can be recovered by investors.

Investors include wealthy society in the Americas and in Europe, banks, celebrities and charities all over the world in what could be Wall Street's biggest fraud. Madoff confessed to his sons that he ran a Ponzi scheme for years, in which early investors are paid off with the money of new clients, according to court documents.

Madoff, a former chairman of the Nasdaq stock market, was also criminally charged on December 11 by U.S. prosecutors in New York, but he has not appeared in court to formally answer the charges.

CONGRESSIONAL PANEL HEARING

A U.S. lawmaker said Wednesday the internal watchdog at the SEC will testify Monday at a hearing in Washington on how it failed to detect the purported fraud. (ID:nN31376507]

Critics claim the SEC missed warning signs and failed to uncover the scandal until Madoff's sons went to authorities three weeks ago. According to court papers, Madoff said it was "all his fault". No one else has been charged.

SEC Chairman Christopher Cox has asked the agency's inspector general, David Kotz, to probe its conduct in the case.

Kotz will testify at a U.S. House Financial Services committee hearing. It will help lawmakers who are planning "the most substantial rewrite" of laws regulating the U.S. financial markets since the Great Depression, said Rep. Paul Kanjorski, a Pennsylvania Democrat and chairman of the subcommittee on capital markets.

Also appearing will be Harry Markopolos, the former chief investment officer at Rampart Investment Management who said he repeatedly tried to get the SEC to investigate Madoff, and Stephen Harbeck, president of the Securities Investor Protection Corp. The nonprofit SIPC was created by Congress in 1970 to maintain reserves to help investors at failed brokerage firms.

The SIPC has said it expects it will take several years to find the money in remote locations and sort through investor losses from the alleged fraud. Its money can be used to satisfy claims of each customer up to a maximum of $500,000. The figure includes a maximum of up to $100,000 on claims for cash.

The court-appointed trustee of the firm, which is being liquidated, is looking into the sale of the trading operation. Madoff ran the investment advisory business separately and was 'cryptic' about it, according to court papers.

The wide scope of Madoff's business continued to reverberate with word that Austria's financial regulator will soon step in to run Vienna-based Bank Medici, in what would be the first known case where a government had to step in to help a bank cope in the wake of the Madoff scandal.

A source with direct knowledge of the matter said Wednesday the regulator would appoint a supervisor to the bank's management in the coming days. With a supervisor in place, the bank cannot take important decisions without state consent.

A spokeswoman for the bank said it would welcome such a step and cooperate with authorities.

(Additional reporting by Karey Wutkowski and Julie Vorman in Washington and Douwe Miedema and Sylvia Westall in London; editing by Jeffrey Benkoe)

From The Times January 1, 2009

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5426032.ece

Kevin Bacon caught up in Bernard Madoff scandal

The Bernard Madoff scandal widened last night when it emerged that Kevin Bacon, the actor, and his wife, Kyra Sedgwick, had been caught up in the financier's alleged $50billion (£34billion) scam.

The news is further evidence of how Mr Madoff and key hedge fund managers targeted tight social networks to entice new clients into his Ponzi scheme.

First, it was the wealthy Palm Beach golf set, then the New York Jewish community and part of the Hollywood Jewish film circle. Now it is the actors' circuit in New York.

A spokesman for Bacon, the New York-based actor who has starred in films such as Footloose, JFK, Mystic River and, more recently, Frost/Nixon, said yesterday that he and his wife, who is also an actor, had investments with Mr Madoff. Mr Bacon's spokesman said: “I can confirm that they had investments with Mr Madoff. I have no further specifics or comment beyond that.”

It also emerged that Henry Kaufman, the former Salomon Brothers economist, lost money through Mr Madoff's schemes. Other apparent victims include Steven Spielberg, the film director, and Eric Roth, writer of The Curious Case of Benjamin Button, a new hit film that stars Brad Pitt.

On Monday the drama will shift from New York to Washington, where officials of the US Securities and Exchange Commission (SEC) will be questioned by the Financial Services Committee of the House of Representatives. Barney Frank, the Democrat chairman of the panel, will want to know how the Wall Street regulator could have allowed an apparent fraud of such magnitude to take place.

Also giving evidence will be Harry Markopolos, the former chief investment officer of Rampart Investment Management, who spent ten years trying to induce the SEC to investigate Mr Madoff. Over the years, Mr Markopolos compiled detailed reports pertaining to Mr Madoff's claims that he could provide investment returns of about 12 per cent a year. In those reports, which he sent to the SEC, he included suggested questions that should be put to Mr Madoff.

The alleged scam has embarrassed the SEC and the FBI, which are trying to construct a case against Mr Madoff. The agencies discovered the alleged fraud only when Mr Madoff's sons, Mark and Andrew, told them three weeks ago about their father's investment practices.

Although the SEC interviewed Mr Madoff in 2006 to question him about the mishandling of client money, the regulator told him to register with it. At the same time, the SEC also interviewed Jeffrey Tucker, the co-founder of Fairfield Greenwich, a hedge fund that invested its clients' money through Mr Madoff.

The hearing on Capitol Hill is expected to rub salt into the wound of the SEC when David Kotz, the inspector-general of the commission, gives evidence. He conducted the immediate inquiry into why the regulator had missed what is believed to be the world's biggest scam. Mr Kotz found that the SEC had been tipped off repeatedly over the past ten years about Mr Madoff's practices but that no inquiry had been undertaken.

Under the terms of a court order issued on December 18, Mr Madoff, 70, was to assemble a detailed list of all investments, assets, loans, lines of credit and accounts held by his company and deliver it to the SEC by last night. He also had been directed to account for all assets that he held for his “direct or indirect benefit”. Ira Lee Sorkin, Mr Madoff's lawyer, said that he expected his client to meet the deadline.

Mr Madoff, who is under house arrest at his flat in Manhattan, has been charged with securities fraud. Court documents indicate that the financier told his sons on December 10 that his investment business was “just one big lie” and that he was “finished.” He is also alleged to have told his sons that he believed the company had run up losses of about $50 billion. Within two days, Mr Madoff was arrested, charged and bailed. His wife, Ruth, was ordered to find and pay for a security company to protect her husband from livid investors - and to prevent him from fleeing.

To think what he could have done for himself and the world if he used all his powers of persuasion for good.

He ripped off lots of charities too.

De-regulation gone wild. Those days are over I hope.