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SIPC to Liquidate Madoff Broker-Dealer. Why?

By Mark H. Astarita, Esq.

We are not getting the whole story. If the Ponzi scheme involved 25 investment adviser clients, why is SIPC liquidating the broker-dealer? Why is the broker-dealer out of business if the scheme involved on the investment adviser clients?One answer is that this scam involved the brokerage firm, which means to me that Madoff could not possibly have pulled this off by himself.Brokerage firm customers receive confirmation slips and monthly account statements. If accurate statements were sent out, surely someone would notice that there was a billion dollars missing from their account. That leads to the conclusion, that at a minimum, statements were not going out, or someone was doctoring them before they went out.There is also the issue of commingling of funds, I suppose...continue to full post

Full post as published by SECLaw.com on December 16, 2008 (boomark / email).