Why Did RenTec Keep Their Madoff TRS After Uncovering His Ponziness, And Other Questions

Tyler Durden's picture

Some stunning revelations have been disclosed in the David Kotz 477 page report on SEC's colossal (and in normal societies, terminal) blunder with Madoff. Primary among them is that everyone's favorite liquidity provider RenTec was not only an indirect investor in Madoff via its Meritage Fund of Funds, not only was fully aware based on internal correspondence that Madoff was a pyramid scheme, but that it did nothing to notify the authorities, and also decided to keep half of its investment with Bernie, even after numerous internal emails certifying the illegitimacy of the fund way back in 2003.

Turns out in 2004 the SEC was conducting a routine examination of RenTec, when it encountered, among other likely very juicy things which however the SEC has no idea how to interpret, some correspondence in which the RenTec brass basically made it clear that everyone in the firm was aware that Madoff was a ponzi, and yet that convinced the fund to only trim its holdings by half in a Total Return Swap controlled by HCH Management, a vehicle managed by Madoff, which traditionally is simply a investment mechanism allowing massive leverage. TRS'es have also recently gained notoriety for allowing hedge funds to sidestep public disclosure thresholds, as best seen in the CSX-Children's Fund case: "As discussed in CSX Corp. v. The Children's Investment Fund Management,
TCI argued that it was not the beneficial owner of the shares
referenced by its Total Return Swaps and therefore the swaps did not
require TCI to publicly disclose that it had acquired a stake of more
than 5% in CSX." Not all too shocking that RenTec, or more specifically Medallion, uses comparable mechanisms... however in venues controlled by Bernie? Now that's juicy.

According to an internal email from November 13, 2003 from Nat Simons, son of the Jim, who has been with the firm since 1994, and who, according to RenTec's marketing book, runs Rentec's "internally owned Fund of Funds" and "Manages fundamentally driven direct investment portfolio" to select firm members had this to say:

Committee members,

We at Meritage are concerned about our HCH investment [Renaissance’s indirect investment with Madoff]. First of all, we spoke to an ex-Madoff trader (who was applying for a position at Meritage) and he said that Madoff cherry-picks trades and “takes them for the hedge fund.” He said that Madoff is pretty tight-lipped and therefore he didn’t know much about it, but he didn’t really know how they made money. [A colleague] heard a similar story from a large hedge fund consultant who also interviewed an ex-trader. The head of this well-respected group told us in confidence that he believes that Madoff will have a serious problem within a year. We are going to be speaking to him in 11 days to see if we can get more specifics.

Another point to make here is that not only are we unsure as to how HCH makes money for us, we are even more unsure as to how HCH makes money from us; i.e. why does [Madoff] let us make so much money? Why doesn’t he capture that for himself? There could well be a legitimate reason, but I haven’t heard any explanation we can be sure of. Additionally, there is a $4 billion Madoff pass-through fund (Fairfield Sentry) that charges 0 and 20% and it’s not clear why Madoff allows an outside group to make $100 million per year in fees for doing absolutely nothing (unless he gets a piece of that). The point is that as we don’t know why he does what he does we have no idea if there are conflicts in his business that could come to some regulator’s attention. Throw in that his brother-in-law is his auditor and his son is also high up in the organization and you have the risk of some nasty allegations, the freezing of accounts, etc. To put things in perspective, if HCH went to zero it would take out 80% of this year’s profits.

Perhaps the best reason to get out is that we really don’t expect to make an outsized return on this investment. Sure it’s the best risk-adjusted fund in the portfolio, but on an absolute return basis it’s not that compelling (12.16% average return over [the] last three years). If one assumes that there’s more risk than the standard deviation would indicate, the investment loses it's luster in a hurry.

It’s high season on money managers, and Madoff’s head would look pretty good above Elliot Spitzer’s mantle. I propose that unless we can figure out a way to get comfortable with the regulatory tail risk in a hurry, we get out. The risk-reward on this bet is not in our favor.

Please keep this confidential.

Nat [Simons]

According to the report, "HCH appears to be a reference to HCH Capital Ltd., an affiliate of Khronos, LLC. Simons Interview Tr. at p. 9." We will get back to HCH and Khronos in a second.

Regarding the size of Meritage's investment in HCH, it was likely not insignificant, based on this disclosure: "To put things in perspective, if HCH went to zero it would take out 80% of this year’s profits." As for Meritage, which is run by Jim's son Nat, it is a "$5 billion fundamental vehicle that invests the assets of founder Jim
Simons and other Renaissance principals and employees and was once part
of Renaissance’s flagship Medallion Fund." Its General Counsel and Chief Compliance Officer is Nat's wife, Laura Baxter-Simons, and the fund's most recent public holdings can be found here. What is also interesting about Meritage, is that it was the seed investor for hedge fund Hutchin Hill, which is run by former Goldman and SAC quant, Neil Chriss. But that's a story for another night.

As to the reason why RenTec/Meritage had to invest indirectly, the report had this to say:

Renaissance invested with Madoff indirectly because Madoff would not accept a direct investment from them. Broder Interview Tr. at pgs. 6-7. Broder speculated that the reason for Madoff’s refusal was that Renaissance employees “were too smart.” Id. at p. 6.

Maybe a little too smart. But definitely smart enough to learn how to generate some very curious liquidity algorithms. Yet Broder's statement betrays an amusing breed of hubris... One knows what they say about what happens to pride before falls and such.

So once RenTec was made aware of Junior's views, the concerns percolated, and were recapped best by 15-25% Medallion equity holder and RenTec Chief Scientist Henry Laufer Ph.D., whose role at RenTec is to "conduct special strategic projects [and to give] final sign off on any changes to investment systems":

I share the concern at Meritage about the HCH investment.

In Nat’s note, I am most worried about the new information in the statement that “Madoff cherry-picks trades and ‘takes them for the hedge fund’.” We at Renaissance have totally independent evidence that Madoff’s executions are highly unusual.

I do not know what to make of the consultant saying

“Madoff will have a serious problem within a year.”

In all, I very much agree with the sentiment[,] “It’s high season on money managers, and Madoff’s head would look pretty good above Elliott Spitzer’s mantle. I propose that unless we can figure out a way to get comfortable with the regulatory tail risk in a hurry, we get out. The risk-reward on this bet is not in our favor.”

A last quote, from Jim, I believe: “If you are going to panic, panic early.”

Henry [Laufer]

Looks like RenTec is one of those places where a quote from the head honcho is required material for any distribution, especially when said head honcho is on the distribution list. Yet, Jim's quote may some day soon prove oddly prophetic.

So how did RenTec manage to so effectively reverse engineer Madoff's book?

Because they did not hold a direct investment with Madoff, they had to perform due diligence using only publicly available information and customer statements provided to them by two other Madoff clients. Laufer Interview Tr. at pgs. 15-16; Broder Interview Tr. at pgs. 13-14. They had no communications with Madoff or BMIS. Broder Interview Tr. at p. 14.

And here is how Junior explains the lack of reporting of their suspicions to the SEC:

We did feel that despite the fact that we’re kind of smart people, we were just looking at matters of public record. I mean, you know, it wasn’t hard to get these statements. These statements, you know, hundreds of – lots and lots and lots of people had Madoff statements. So we didn’t really feel that we were dealing with something which is proprietary, and therefore the conclusions that we came to were something that was – you know, other people were unlikely to come to. And it’s not like we needed a PhD in mathematics to do the … study on the OEX.94 Right? I mean, this is just – just looking at the size of the market.

Of course, it had nothing to do with trying to figure out a way to capitalize on their insight into what would eventually become the biggest Ponzi in history (until the eventual implosion of Social Security of course), as that would be somewhat unethical...

Yet at least RenTec is perfectly objective about their reverse engineering was trying to achieve. According to Henry Laufer:

And we would have loved to figure out how he did it so we could do it ourselves.

Good to know what noble causes drive RenTec to figure out what makes a massive criminal enterprise tick.

So did RenTec immediately bail out of the CHC TRS once the epiphany of Madoff's crookedness struck then? Of course not:

After performing their due diligence, Laufer stated that “we were very worried” about the investment with Madoff. Laufer Interview Tr. at p. 33. However, opinions diverged at Renaissance about whether to entirely divest itself of the investment. Simons Interview Tr. at p. 28. Broder and Simons wanted to get out of the investment. Broder Interview Tr. at p. 35; Simons Interview Tr. at p. 27. But one piece of information “helped to allay concerns” of other employees: “[W]e were aware that … [Madoff] had been investigated by the SEC.” Id. at pgs. 17, 28. Because of the competing viewpoints, Renaissance stated they initially reduced their investment by approximately one half and later got out of the investment entirely for unrelated reasons.

So RenTec wants the gullible SEC to believe that it would not eliminate its Madoff holdings just because the Ponzi had been audited in 1992, a whole 12 year prior to the time all these events were occurring? Good for them, and apparently the SEC bought it. Yet those astute enough to see beyond this amusing diversion would love to know what the real reason for Simons' persistence in holding on to Madoff was (and what was the final date of TRS disposition), as well as what was the ultimate P&L compliments of Madoff's gullible investors.

Going back to the original point by Nat "why does [Madoff] let us make so much money?" maybe it would be useful to uncover just how much money RenTec did make off Madoff's so called operations, and by implication how much RenTec should be on the hook for, if the Madoff trustee actually does his job properly of recovering capital for Bernie's bankrupt investors. After all has it not been the case that Madoff in essence never really traded? So just what exactly was Bernie doing managing a highly complex instrument such as a TRS? Inquiring minds want to know so much more.

And speaking of ever more questions, just how is Khronos involved? "HCH appears to be a reference to HCH Capital Ltd., an affiliate of Khronos, LLC." Has the $2 billion Fund of Funds, run by David and Rafael Mayer been compromised by Madoff a little more than has been let on? While Khronos seems to be a big fan of Einhorn, it doesn't seem to be too actively involved in the investing world these days. And we all know how much clout FoF's have these days, after the whole Fairfield Sentry fiasco.

We will have some additional color on Khronos soon, in the meantime, we would like to bring your attention to an interesting paper by Markov Process International, whose purpose, since we are discussing reverse engineering of funds, is to do just that, however not to Madoff, but to RenTec's non-employee investment vehicles, RIEF.

We won't discuss this paper at the time, save to highlight the conclusions:

During the recession of 1989-92, the hypothetical portfolio underperformed the index for four consecutive years–about 65% in total. During the technology “bubble” of 1999-2000, it underperformed by about 25%, trailing the index in each consecutive year.

Thus, the fund’s monthly 95% VaR computed in March 2007 is equal to 8%, indicating a potential 8% monthly loss during a twenty month period (assuming constant exposures).

If RIEF has an 8% VaR, one wonders where Medallion stands, and if adding a zero to the number would not be conservative. Then again, Medallion is in the noble liquidity provisioning business (and its entrails spill over absolutely in every corner of the market). And, if as Zero Hedge likes to warn on occasion, there is a total collapse in the computerized liquidity landscape that so many have gotten all too fond of, Medallion's VaR would really be 100%. Although with the "abundance" of public data on what really happens behind the scenes at those 2,600 cores, one can only hope that the SEC is up to par in determining just what the risk potential is in East Setauket (and we are not even talking about alleged abuses of impropriety)


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Anonymous's picture

I think rentec is also a ponzi scheme. They closed medallion, started losing money and then opened a new fund to pay for themselves at the expense of math-impressed dumb money.

slore's picture

brilliant; now shove it down their fucking throats until they do something.

Anonymous's picture

I cant see why we are getting hot and bothered over this:
1) Ok, so they figured or strongly suspected that Madoff was a Ponzi. Took part of their money off the table, so whats wrong with that. Didnt share their conclusions with anyone, so what? They are not policemen , or activist blogs..

2) I guess the real question is when they took the other half out? I havent seen anything in the article which suggests that they somehow colluded with Madoff and timed the exit before the denouement.So they took their chances, along with many others..


OrganicGeorge's picture

A fiduciary duty is a legal or ethical relationship of confidence or trust between two or more parties, most commonly a fiduciary or trustee and a principal or beneficiary. One party, for example a corporate trust company or the trust department of a bank, holds a fiduciary relation or acts in a fiduciary capacity to another, such as one whose funds are entrusted to it for investment. In a fiduciary relation one person justifiably reposes confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires one to act at all times for the sole benefit and interests of another, with loyalty to those interests.

Anonymous's picture

Madoff was the fidiciary here... Ren-tec was a fiduciary for Ren-tec's clients... as a result, they had a fiduciary duty to get the hell out of dodge as soon as they smelled something fishy (aside from the duty to prudently invest in the first place). I think what you're advocating is the good samaritan rule, which doesn't exist.

All I see from this article is that Ren-tec never got specific confirmation it was a ponzi... it simply suspected as much and, as a result, pulled the plug.

The article is much more damning of the SEC given Ren-tec's methods of determining the likelihood of a fraudulent investment, were purely from public sources and anecdotal evidence. In other words, if the SEC had even the most remote inkling to investigate, it would have uncovered the scheme. But we need more regulation, right?

Gabriel Gray's picture

Last week I witnessed a murder and can identify the assailant. The week before that I was witness to a large bank robbery and also can identify the perpetrators.

pffft. why should I bother contacting the authorities, not my problem.

Bob's picture

Actually, in these cases as an ordinary citizen your responsibility to report is a moral but not a legally binding one. 

The fiduciary responsibilities of a formal fiduciary agent, on the other hand, such as a policeman who witnessed or had reason to believe that he had material information about such crimes would be a whole different matter.  This is where all of Wall Street, particularly all the licensed professionals working within every single agency (accountants, lawyers, etc.) is  squarely on the hook. 

This is the completely vulnerable underbelly of the entire mass criminal enterprise that is the financial industry. 

Make this one stick and you may see all the rats streaming from the concealed bowels of the Street to Fed and State authorities to save their asses and professional futures. 


Kaiser Soze's picture

You work for the SEC?

Anonymous's picture

Tyler, how is it that you can connect the dots, in your typical elegant fashion, and every other media outlet get an epic fail on this (and so many other) issue (s)?

And when exactly do you sleep?

Anonymous's picture

Zero Hedge is doing the INVESTIGATIVE REPORTING job that the mainstream financial media should be doing, but is not.

CNBC is losing viewers daily because it is beyond comical that they would continue to think Americans are ok with being continually LIED TO.

They are nothing more than a megaphone for complicit TARP-sucking corporations. (GE)

Bob Dobbs's picture

Like a Unix daemon, he has spawned multiple independent children.

Miles Kendig's picture

Who had to wait a few days on the porch first before they could come along and play

TumblingDice's picture

Wow so this is how it all runs huh? Pretty sickening.

"It's high season on money managers, and Madoff's head would look pretty good above Eliott Spitzer's mantle." It looks like its all just a big fucking game. It's pretty obvious they knew shit was rotten yet the reason they gave for Madoff going down was not because he was a cheat, but because some NY attorney general had to "fill his mantle", fulfill his personal ego and construct another step in his political stepladder. They can't think of it from the perspective of breaking the law or being unfair because hell, if they thought of it that way then they're just as guilty as Madoff.

This is how our financial system works, ponzi upon ponzi built entirely on faith. Social Security pales in comparison IMO. The whole thing is a confidence game played by ethically bankrupt players. I am a part of it but I only play the short side (and I have been losing money recently but am up overall thank you very much). Thats the only way I can live with myself when I'm at the casino. Otherwise I'm just being herded and helping lure in more suckers into the next crash. And the crash will happen because like any Ponzi scheme, it relies on a continuous inflow of new suckers into the pyramid. When it is just new money from the Fed coming it, then it doesn't work, because sure they can sell to themselves, but someone has to be left holding the bag, and so far only performance chasing rich folk hedge funds are buying it.

The whole system is leveraged to such an extent that it is, for all intents and purposes, a ponzi scheme. We have even legalized the ponzi scheme by abandoning mark to market. Putting down wealth on the banks' books that we know doesn't exist. If you play along you're either a sucker or RenTec a willful criminal participant who "would love to figure out how to do it yourself" We need to re-haul the monetary system to such a degree that it places the incentive structure right side up again, instead of running a continuous moral hazard. Otherwise, there's nothing good that will come of this. If anything this is an opportunity to expose the fraudulent system that is the Federal Reserve and settle on something better.

Anonymous's picture

You gotta love it - the more these gov't agencies mess up - that is, the bigger their failure - the more taxpayer money they receive. Seems like everyone knew about madoff except the SEC.

Anonymous's picture

Tyler: I saw what you saw on rentek and thought that was more of an error than markopolos. But something else struck me. It was an email exchange between regulators where they comment about Bernie's clout; that he was connected. These were words/emails of REGULATORS. It makes it seem as though it was commonplace for regulators to always understand if a target was "protected." Lets think of this another way, in the absence of language indicating that a target does NOT have clout, is that a signal at the SEC to pound the poor bastard into oblivion? It makes it seem as though the sec is a place where regulators always know if they're dealing with someone who has cover...unbelivatble really...

Miles Kendig's picture

Just a key indicator of the what and how of the current landscape.

Bob's picture

Perfectly analogous to NYPD adopting a hands-off policy wrt the Mafia. 

Anonymous's picture

Yea but even the mafia did SOME good.

arnoldsimage's picture

i have news for everyone... our entire FUCKING financial system in the united states is one HUGE fraud. there is corruption in every corner for crying out loud. i'm truly surprised our country isn't on fire as i speak. a total banana republic clothed in five thousand dollar suits. what a complete sham we are.

Gordon_Gekko's picture

The flaw lies with out fiat money system. To quote Ayn Rand (again):

"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, 'Account overdrawn.'

When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, 'Who is destroying the world? You are".

BTW, for all you label-slapping people out there, I am not an "objectivist" or anything, but I know when I read something true and sensible.

Anonymous's picture

YES. Ayn Rand is right on the money with that passage.
It is sickening how pacified the sheeple still are in this country. I can't believe their arent riots in the streets every day.

TumblingDice's picture

we still have our bread and circus.

MinnesotaNice's picture

It is really interesting how prophetic she was... and how applicable her words are now... and I have no political allegiance... but when you hear truth it resonates.

Bob's picture

Too bad her implicit solution (at least as conjured in the minds of her disciples) only supports the evil.  Of course, so it is with every idiologically "pure" world perspective . . . religion should be a beautiful thing, but we all know how it falls so short. The problem is that puritanical idiologies are ripe for hijacking by sociopaths who use the systems to exploit the gullible.  Puritanical systems do not sanely account for the unmitigatable vagarity of human nature.  This is what makes checks and balances a necessity--no one can be trusted to police themselves under any system and everyone needs an opposing interest/agency that is equally strong to protect those in power (and those subject to that power) from the inevitable abuses that power will produce.

Especially when the power can make its holders Masters of the Universe. 

ZerOhead's picture

Time to audit the Fed perhaps?

Hephasteus's picture

It's the ONLY way it will work. Relationships with unequal power balances just do not work out well for anyone.

Anonymous's picture

Well said.....bravo.

Anonymous's picture

SEC is the syndicate's muscle in the extortion racket. Protection offered other criminal classes in the pay to play casino of America.

If we want a country as envisioned by founding fathers we have to amend the constitution to better regulate the banking system, bound in the fractional reserve which lends itself to much mischief, and put check/balances upon banks.

Lobbying and purchasing politicians has hardly been addressed too.

Hard to even consider a renaissance of freedom in the USA with so much systemic intrigue and state sponsored corruption. Maybe America the beatiful needs to fragment in order to create sectionalisms where one may arbitrage for freedom. A huge umbrella of oppression exists now and is enforced by the state's tentacles.

Assetman's picture

Rentech is endemic of the type of firm that-- if they could have figured out the details of the Madoff scam, they might have tried it.  Except that they may have found it too risky.

In this case, Rentech may be guilty of having its suspicions about Madoff's operations-- but it didn't have the time or inclination of follwing through to the regulator of choice.  Still, there were more than enough clues for the SEC to follow up from.  They just didn't do squat.

At some point soon, someone is going to need to press a massive reset button.  Our political and financial systems are in shambles-- and it's going to take some courageousness out of new leaders before we can hope for real change.  That may not happen any time soon... but I think events will dictate finding those leaders willing to serve.

Anonymous's picture

Don't follow "leaders", unless you know them personally.

Gordon_Gekko's picture

Is there ANY operation on Wall Street that is NOT a Ponzi scheme?


BTW, excellent work TD.

Pizza Delivery Man's picture

Madoff is water under the bridge.

For every event there is an equal or opposite reaction.

What I want ZH and it's readers to understand is this...

You can sit and bitch about all the inequalities and corruption. That is great and all, the information is valuable.

But what are people doing about it? Nothing. Money controls the world so unless someone wants to confront the corruption in a court of law this conversation is fruitless and insulting.

ZH - You have the information...Why not bring it to the courts, I'm sure your readers would at least endorse you...I would.

The only thing more potent than money is the power of the (angry) collective body.

You have spent enough time defending your anonymity while comparing yourself to the likes of Thomas Jefferson and James Madison. The only difference is...they actually did something.

It comes down to freedom, what it means to you, and what you are willing to do to protect it. THIS BLOG IS IMPORTANT AND INFLUENTIAL!

Gordon_Gekko's picture

You mean the courts that have already been bought and paid for by our oligarchs? No thank you. Nothing less than complete and total repudiation of the fradulent paper currency peddled by these criminals alongwith making an example out of those who are commiting these crimes will stop this looting. I mean if someone entered your house and started looting and pillaging, will you go complaining to a (bought and paid for) court or will try to defend yourself using any and all means possible right there and then? It is the same with these criminals; the only difference is that they are wearing government regalia. The founders didn't win freedom and independence by going hat in hand to the British courts - they got it by fighting for it.

Pizza Delivery Man's picture

It takes an influential body to rebel against a powerful entity.

ZH has the influence. ZH constantly reverts to the federalist papers...but those that wrote the federalist papers ended up physcally rebelling against the government of England.

I'd like to see a more public ZH.

Anonymous's picture

First, I don't think you want to see granny with a pitchfork take the streets... I think we idealize the notion of a systemic change creating the world inside our brains... but what we fail to realize is that world is different for everyone and, ultimately, it takes men far greater than ourselves to settle our differences. I highly suspect that this scenario would lead to unimaginable atrocities... morality, for americans at least, is something long since abandoned.

The other issue we have is that it can take centuries to build a society only to have it crumble in a few years... It's the rule of wealth... eventually, old money falls upon a drug addicted, inept, unstable person and is gone to the casino, stripper, etc. in two shakes of a lamb's tail.

Second, you can bet your sweet ass this report is going to make it to the court of law, IMMEDIATELY. There is currently a money grab going on for the left over table scraps... you think they won't want ren-tec to pony up? You think a Judge won't add them as a party after a report from the SEC? They'll have plenty of explaining to do and documents to provide (shred).

Miles Kendig's picture

but what we fail to realize is that world is different for everyone and, ultimately, it takes men far greater than ourselves to settle our differences.

Beg to differ.  The extraordinary is always accomplished by the ordinary.  The fact is that history remembers the brave willing to stand against tyranny and succeed, but few that do are successful since the tall blade of grass sees the blade first.  Here is where the courage borne of conviction and clear headed action is called for.  The greatest failure is the failure to try and stand.  And in so doing fade into history without positive effect consigning their heirs to subservience of the corrupt.

deadhead's picture

Layne....beautifully spoken!

Bob's picture

That time may be at hand . . . see Hephasteus' post below.

Ben_the_Bald's picture

Pizza guy: You are vastly overestimating ZH.

MinnesotaNice's picture

Maybe it will be someday... but right now I view ZH as a terrible itch that Wall Street can't quite reach to scratch... and every once in a while the itch flares up into full-fledged hives creating agony for Wall Street. 

Larry Doyle's picture

Mr. Pizza Delivery Man, 

Great point. Are there any pending lawsuits to address points you raise? Yes. 

Amerivet Securities of MorenoValley, CA has filed a complaint against FINRA compelling FINRA to open its books and records. In the complaint, there is an allegation that FINRA had invested in Madoff. Do they have a smoking gun? 

For those interested in hearing from the attorney representing Amerivet, former SEC chair Harvey Pitt, the head of the Madoff Victims Coalition, and a Wall Street veteran who has written extensively about FINRA, you may care to read... 


Sqworl's picture

Mr. Doyle: Thank you for your continued coverage of this corrupt SRO.  Unfortunately, we all know that they will continue to operate and monitize themselves from their illegal operaton.  I hope Harvey goes the distance and exposes the corruption across the regulatory landscape.

Hopefully, we will see the payoffs via salary and bonus to the following individuals, Mary Shapiro, Rick Ketchum, Linda Feinberg and lastly, the board members payout!!!


Anonymous's picture

On the individual level, start by withdrawing your cash from any and all bailed-out institutions and place it with a reputable, smaller institution. Don't buy any financial products, insurance products etc. from the crooks.

Vote with your assets.

Anonymous's picture

Have you considered that the SEC is being set up? Madoff was a Reichstag fire for gutting the SEC of enforcement powers, concentrating more power in the Fed.

I was told by a Washington (ex-Fed) authority I trust last year that a plan was in operation to gut the SEC of its powers, empower the Fed with overall authority over both investment and commercial banks (because they pose "systemic risk"), and leave the rump SEC as toothless as the CFTC. Madoff is the engine for making this plan palatable and justifiable to the sceptical in Congress.

Think about it. You know it makes sense.

Miles Kendig's picture

A what and how that fits the evidence.