Tuesday, December 16, 2008

Madoff fraud continues to worsen

Madoff’s Records ‘Utterly Unreliable,’

Dec. 16 (Bloomberg) -- Bernard Madoff’s financial records were “utterly unreliable” and will take six months to sort out, said Stephen Harbeck, president of the Securities Investor Protection Corp.

“There are some assets, but I have no idea what the relationships of the assets available are to the claims against them,” Harbeck said on Bloomberg Television. “The records are utterly unreliable on this case.”

His comments came as Bank Medici AG of Austria became the latest lender to reveal a loss from Madoff’s alleged $50 billion fraud. Two funds at the Viennese bank, 75 percent owned by Chairman Sonja Kohn, invested $2.1 billion entirely in Madoff’s firm, the bank said today. It joined institutions and wealthy individuals from Tokyo to Paris. New York’s Yeshiva University said it lost $110 million, mostly through hedge funds controlled by trustee J. Ezra Merkin.

U.S. Senate Banking Committee Chairman Christopher Dodd, meantime, told the Securities and Exchange Commission to explain how it failed to detect the “giant Ponzi scheme.”

Dodd, a Connecticut Democrat, “is seeking more information from the SEC about this case,” Kate Szostak, the senator’s spokeswoman, said in a statement late yesterday. “Senator Dodd is concerned not only about the people caught up in this reported scheme who may have been misled, but how such a massive fraud could have gone undetected.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=a_OeM.osxA6Q&refer=home

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