New York City – Chairman of Yeshiva University Business School Arrested For Securities Fraud

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    Mr. is teh chairman of Sy Syms School of Business for Yeshiva UniversityNew York City – On Wall Street, his name is legendary. With money he had made as a lifeguard on the urban beaches of Long Island, he built a trading powerhouse that had prospered for more than four decades. At age 70, he had become an influential spokesman for the traders who are the hidden gears of the marketplace.

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    But on Thursday morning, this consummate trader, Bernard L. Madoff, was arrested at his Manhattan home by federal agents who accused him of conducting a multibillion-dollar fraud scheme — perhaps the largest in Wall Street’s history.

    Regulators have not yet verified the scale of the fraud. But the criminal complaint filed against Mr. Madoff on Thursday in federal court in Manhattan reports that he estimated the losses at $50 billion.

    “We are alleging a massive fraud — both in terms of scope and duration,” said Linda Chatman Thomsen, director of the enforcement division at the Securities and Exchange Commission. “We are moving quickly and decisively to stop the fraud and protect remaining assets for investors.”

    Andrew M. Calamari, the associate director of enforcement in the S.E.C.’s regional office in New York, said the case involved “a stunning fraud that appears to be of epic proportions.”

    According to his lawyers, Mr. Madoff was released on a $10 million bond. “Bernie Madoff is a longstanding leader in the financial services industry,” said Daniel Horwitz, one of his lawyers. “He will fight to get through this unfortunate set of events.”

    Mr. Madoff’s brother and business colleague, Peter Madoff, declined to comment on the case or discuss its implications for the Madoff investment firm, which at one point was the largest market maker on the electronic Nasdaq market, regularly operating as both a buyer and seller of a host of widely traded securities. The firm employed hundreds of traders.

    There was some worry on Wall Street that Mr. Madoff’s fall would shake more foundations than his own.

    According to the most recent federal filings, Bernard L. Madoff Investment Securities, the firm he founded in 1960, operated more than two dozen funds overseeing $17 billion.

    These funds have been widely marketed to wealthy investors, hedge funds and other institutional investors for more than a decade, although an S.E.C. filing in the case said the firm listed 11 to 23 clients.

    At the request of the Securities and Exchange Commission, a federal judge appointed a receiver on Thursday evening to secure the Madoff firm’s overseas accounts and warned the firm not to move any assets until he had ruled on whether to freeze the assets.

    A hearing on that request is scheduled for Friday.

    Regulators said they hoped to have a clearer picture of the losses facing investors by that court hearing.

    “We have 16 examiners on site all day and through the night poring over the records,” said Mr. Calamari of the S.E.C.

    The Madoff funds attracted investors with the promise of high returns with low fees. One of Mr. Madoff’s more prominent funds, the Fairfield Sentry fund, reported having $7.3 billion in assets in October and claimed to have paid more than 11 percent interest each year through its 15-year track record.

    Competing hedge fund managers have wondered privately for years how Mr. Madoff generated such high returns, in bull markets and bear, given the generally low-yielding investment strategies he described to his clients.

    “The numbers were too good to be true, for too long,” said Girish Reddy, a managing director at Prisma Partners, an investment firm that invests in hedge funds. “And the supporting infrastructure was weak.” Mr. Reddy said his firm had looked at the Madoff funds but decided against investing in them because their performance was too consistently positive, even in times when the market was incredibly volatile.

    But the essential drama is a personal one — one laid out in the dry language of a criminal complaint by Lev L. Dassin, the acting United States attorney in Manhattan, and a regulatory lawsuit filed by the S.E.C. According to those documents, the case came to light on Wednesday when Mr. Madoff told two senior employees at the firm that his money-management unit was “all just one big lie” and “basically, a giant Ponzi scheme.”

    By this account, Mr. Madoff said that he intended to surrender to authorities in about a week but first wanted to distribute approximately $200 million to $300 million to “certain selected employees, family and friends.”

    On Thursday morning, he was arrested on a single count of securities fraud, which carries a maximum penalty of 20 years in prison and a maximum fine of $5 million.

    Mr. Madoff is currently on the board of Nasdaq OMX Group, formerly the Nasdaq Stock Market, and serves as the chairman of the Sy Syms School of Business at Yeshiva University. His son Mark Madoff served as the vice chairman of the board of directors of the National Association of Securities Dealers, from 1993 to 1994 and was also an board member of brokerage firm A.G. Edwards.


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    59 Comments
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    Anonymous
    Anonymous
    15 years ago

    This is the ethical YU?

    Anonymous
    Anonymous
    15 years ago

    better what he did than some lowlife molester in BP

    Anonymous
    Anonymous
    15 years ago

    This is one man who chairs a secular department at YU. A blow to the University, but not to the Yeshiva. Thanks for the kind comment, though, #1 .

    yossi c
    yossi c
    15 years ago

    This is Crazy. Rubashkin gets no bail but this guy gets bail for a $50 billion fraud. This makes no sense.

    bitachon
    bitachon
    15 years ago

    Didn’ YU just have a forum about enforcing hechsher tzedek?
    Maybe a forum on following choshen mishpat and not making a chilul Hashem!!
    We all make mistakes but be consistant and don’t be a hypocrite!!
    Waiting for the hechsher tzedek people to emerge with a statement.

    A YU lamdin.

    Anonymous
    Anonymous
    15 years ago

    It happens to every institution, give them a break – I’m sure if they knew this was an issue he never would have been on the board.

    Oy Gevald
    Oy Gevald
    15 years ago

    I say give him a federal bailout. He’ll make enough money to put GM in the black. GM will never really know how to recoup their losses.

    Anonymous
    Anonymous
    15 years ago

    is anyone else noticing a trend—major events and catastrophes knocking things down left and right? i feel like the light of Hashem is peeking through with a bit more power than usual. it seems to be getting more and more intense and it should be opening our eyes….lets pay attention!

    Anonymous
    Anonymous
    15 years ago

    give me a break if this would of been a chasidishe guy they would eat him up alive and no bail

    Anonymous
    Anonymous
    15 years ago

    Hmmm, a day after they hosted “Ethics and kashrus”. Business ethics at rubashkins deems them treif acording to the Uri L’Tzedek weirdo right?

    So YU officials have fraudulent practices, so according to HIS logic, YU is Treif!!!!!!

    see my friends, Hechsher Tzedek and Uri LTzedek will fall because theyre not Torah, only Torah lasts.

    oh the irony 🙂

    chusid
    chusid
    15 years ago

    wow he is not a chusid ?????
    they blame and allways criticize the frum poeple

    Anonymous
    Anonymous
    15 years ago

    It takes more than one (or a few) to run a scam this big – and once that big you can fool many people (I guess) with big donations

    Shrage Faavel
    Shrage Faavel
    15 years ago

    Me meg zich shehmen>
    We just finished weeks of Achdus (Mumbai) and now we start bashing YU. Whats your Heter.
    If you cant say anthing nice, say nothing at all.
    Gut shabbos

    Anonymous
    Anonymous
    15 years ago

    i think ponzi woild be a good name 4 a board game

    spitzer
    spitzer
    15 years ago

    he is a chairman. show him the respect he deserves

    Anonymous
    Anonymous
    15 years ago

    I mean do you want to tell me that the guy making 600 dollars a week has more money then this billionares what evreyday you hear another billionare never had a penny just scams and lies

    YU Bachur
    YU Bachur
    15 years ago

    This has nothing to do with YU. He just happens to be on the board, he (may have) commited the crime, but not YU.

    Stop trying to yell at YU b/c you can’t stand the fact that bachurim with nitted yalmukas are better off (in learning and certainliny in midot) then the ones with velvet yalmukahs!

    Anonymous
    Anonymous
    15 years ago

    I’m surprised the judge did’t evoke the law of return to say the he is a flight risk and take off with his fortune to Israel.

    Anonymous
    Anonymous
    15 years ago

    reb robert kasirer is his rebbe

    Anonymous
    Anonymous
    15 years ago

    Not trying to knock anyone in particular. However, it hurts to see Modern Orthodox try to sterotype Orthdox Jews a certain way and wish the goveerment success against a fellow Jew, while they themselfs are not better. There are shady people all over, but we must love our fellow Jew regardless what they did. We are Jews first, like brothers who will protect each other even when they may not deserve it otherwise.

    Anonymous
    Anonymous
    15 years ago

    the sad thing is, they’ll throw him under the bus

    Anonymous
    Anonymous
    15 years ago

    This story will probably rank up there close to Enron and Lehman Brothers, there are investors with 10s of millions of dollars with this firm. I dont understand where the accountants and auditors were. This is so much bigger than Wextrust its baffling. You couldnt even invest there unless you knew someone.

    critical minyan
    critical minyan
    15 years ago

    the difference between YU and the Charedi community is how the man will be defended. YU will kick him off his board and will not defend him publicly. You cannot read a YU forum and see anybody saying his actions were defensible.
    In cases like Rubashkin or Jacobowitz, their Chasidic defenders complain its anti-semitism and that the crimes they commit are absolved by the tzedakah the people gave.

    Anonymous
    Anonymous
    15 years ago

    I am certain that he had no intention of defrauding anybody. Unfortunately, the market turned against him, and he wasn’t able to recoup his losses. He probably tried to trade his way out of it but, eventually, his losses spiraled out of control.
    Let’s all have rachmones on him.

    Anonymous
    Anonymous
    15 years ago

    I find it helpful to think of stockbrokers and their ilk as “Used Corporation Salesmen.” That way, you’re never surprised by what they say or do.

    DEEPTHINKER
    DEEPTHINKER
    15 years ago

    MOST OF WALL STREET IS A “PONZI” SCHEME. WHY DID THEY PICK ON HIM?

    Pashuteh Yid
    Pashuteh Yid
    15 years ago

    The deeper understanding of this problem, and the general worsening of the economy is that people think the financial markets are a source of money. They are not. They only pass money from one hand to another, but do not grow the economy as a whole.

    The emphasis for Jewish kids has got to get back to science, technology, and engineering, where we take G-d’s raw materials from the ground, use ingenuity, add value and develop new, useful and exciting products and cures.

    Technology, manufacturing and agriculture are really what drives the economy.

    Unfortunately, in the Yeshivas, science and engineeering are viewed with disdain, or completely ignored, thus leaving people with no options other than to “invest”. But investments are worthless unless there is actual technology behind the companies.

    We do our kids a great disservice when we tell them they need no science skills, and if need be can always “go into business” or “invest”. In fact, many of these investments are backed by nothing but air, as we see with the fancy bundled mortgage securities, and now this.

    Let us realize what we need to do to promote real economic growth.

    Anonymous
    Anonymous
    15 years ago

    Hopefully he didn’t take YU’s money. Or they’ll be left with a lot more than a $24 million deficit. This man has destroyed the lives of many people. $50 Billion dollars is a lot of life savings and retirement funds. People can’t start over from scratch at age 85. When he knew his scam was collapsing he held off to give $200-300 million dollars to his friends and family.

    His max. fine is $5 million? Is he liable for civil damages also? I hope they throw the book at this guy.

    Rot in jail scum bag!

    Shaul in Monsey
    Shaul in Monsey
    15 years ago

    It’s interesting to note that no one is crying about antisemitism here. And no one is running to Madoff’s defense claiming this is an SEC/Taxi and Limo Commission/Jimmy Hoffa/Santa Clause conspiracy against a wealthy Jew who has given millions and millions to charity. Where is the outcry? Where are the accusations?

    Truth be told, like it or not, Modern is the new Frum, and Black Hat / Chareidi / Flakewood / Chaddidish is the new Krum. There is barely a minyan left of bnei Torah on the derech haTorah al pi Moshe MiSinai.

    Anonymous
    Anonymous
    15 years ago

    I have heard a few yeshivas had $$ with him
    as well as some prominent askanim
    hashem yerachem

    Chana L. Schochet
    Chana L. Schochet
    15 years ago

    YU just had a forum promoting Hechsher Tzedek, and bashing Rubashkin’s. 50 BILLION Dollar fraud. YU Chairman admitted. What a Chillul Hashem! Enjoy the just desserts. What goes around comes around. What do all of you self righteous individuals(especially the YU crowd) have to say now? He admitted to the crime and was free on bail, while Sholom Rubashkin pleaded not guilty and is seen as a flight risk. It seems one is Jewish and can run to Israel, which makes the Chairman the Eiruv Rav?

    insider
    insider
    15 years ago

    FYI – YU INVESTED $$$$$$$$ WITH HIM AS WELL!!! IF THEY KNEW THAT IT WAS A PONZI SCHEME DO YOU THINK THEY WOULD HAVE INVESTED THEIR OWN MONEY?????