Quantcast
Feeds: Email, RSS & Twitter

Get Our Videos By Email

 

8,300 Unique Visitors In The Past Day

 

Powered by Squarespace

 

Search The Archive Of 15,000 Videos

SEARCH THE DAILY BAIL

 

 

Hank Paulson Is A Criminal - Pass It On

"The Federal Reserve Is A Ponzi Scheme"


Get Our Videos By Email

THE FED UNDER FIRE: Must See Clip

Bernanke's Replacement: Happy Hour In Santa Cruz

Must See: National Debt Road Trip

"Of Course We're Not Going To  Payback the Chinese."

Dave Chappelle On White Collar Crime

Carlin: Wall Street Owns Washington

SLIDESHOW - Genius Signs From Irish IMF Protest

SLIDESHOW - Airport Security Cartoons - TSA

Most Recent Comments
Cartoons & Photos
SEARCH
« Facing Foreclosure Without Missing A SINGLE Payment: One Couple's Housing Nightmare | Main | Lawyer Accuses Nevada Supreme Court Of 'Predetermining' Foreclosure Cases In Favor Of Banks »
Wednesday
Feb232011

Citigroup Saw Warning Signs, Knew Of Madoff Fraud; Picard Suit Wants $430M In Damages

Source - Bloomberg

Citigroup ignored warning signs of Bernard L. Madoff’s Ponzi scheme, and a bank executive knew the con man’s stated trading strategy couldn’t generate the reported returns, the trustee liquidating Madoff’s firm said in a lawsuit.

The unidentified Citibank executive, who was responsible for making recommendations to clients on derivatives, “concluded” by June 2007 that returns reported by a Madoff feeder fund, Fairfield Sentry Ltd., couldn’t have come from the strategy, trustee Irving Picard said in a complaint unsealed yesterday. The executive reached his conclusion after meeting with analyst Harry Markopolos, a whistleblower who also alerted U.S. regulators to the fraud, Picard said.

The Citibank official later communicated with Markopolos orally and in writing, specifically discussing the fraud before the Ponzi scheme was exposed in December 2008, Picard alleged.

“Citi knew, and was on notice of, irregularities and problems concerning the trades reported by BLMIS, and strategically chose to ignore these concerns in order to continue to enrich themselves,” Picard said in the complaint, referring to Madoff’s firm, Bernard L. Madoff Investment Securities LLC.

Picard laid out in the complaint details of a lawsuit he filed under seal in December against New York-based Citigroup and other banks. He is demanding $425 million from Citigroup - money it received “in connection with” a loan to a Madoff feeder fund and a swap transaction with a Swiss hedge fund linked to a second feeder fund, Picard said.

Continue reading at Bloomberg...

--

We first got an inkling of Picard's filing from this Bloomberg story in December.

Citigroup, Bank of America Sued by Madoff Trustee

Citigroup Inc.’s Citibank, Bank of America Corp.’s Merrill Lynch unit and five other banks were sued by the trustee liquidating Bernard Madoff’s firm to recover more than $1 billion for the con man’s defrauded customers.

The banks, which include Natixis SA, Fortis Prime Fund Solutions Bank (Ireland) Ltd., ABN Amro Bank NV, Nomura Bank International Plc. and Banco Bilbao Vizcaya Argentaria SA, received money through Madoff feeder funds when they knew, or should have known, that Madoff’s investments were a fraud, the trustee, Irving Picard, said yesterday in a statement.

Picard, who faces a two-year legal deadline that runs out Dec. 11, has filed hundreds of suits in the past month, seeking more than $34 billion from banks, feeder funds, investors and others alleged to have profited from Madoff’s decades-long Ponzi scheme, the biggest in history. So far, Picard has recovered about $2.5 billion for victims of the fraud.

http://www.bloomberg.com/news/2010-12-09/madoff-trustee-picard-sues-citibank-merrill-nomura-banco-bilbao-vizcaya.html

---

 

We have been unable to locate a copy of Picard's Citigroup suit, but did find the J.P. Morgan lawsuit.

Madoff Trustee Irving Picard's suit against J. P. Morgan...

Meanwhile, back in the joint, CNBC reports:

Allen Stanford and Bernie Madoff In Same Prison

Accused Ponzi schemer Allen Stanford has joined convicted Ponzi schemer Bernard Madoff at the federal prison complex in Butner, North Carolina.

CNBC first reported Tuesday week that Stanford would be transferred to the facility for drug treatment. In January, U.S. District Judge David Hittner ruled that Stanford was incompetent to stand trial and ordered the drug treatment. Hittner suggested it take place in Butner, which has a well-regarded prison hospital, and federal officials agreed.

Stanford and Madoff will likely never encounter each other. Madoff is serving a 150-year sentence in the complex's medium security unit.

---

From last week...

 

 

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (6)

Bernard Madoff: Citigroup ignored Ponzi scheme warning signs, claims trustee Irving Picard

The trustee for jailed fraudster Bernard Madoff has claimed in a lawsuit that Citigroup ignored warning signs of the multi-billion dollar Ponzi scheme, it was reported on Tuesday night.

http://www.telegraph.co.uk/finance/financetopics/bernard-madoff/8342034/Bernard-Madoff-Citigroup-ignored-Ponzi-scheme-warning-signs-claims-trustee-Irving-Picard.html
Feb 23, 2011 at 1:43 AM | Registered CommenterDailyBail
Citigroup, Bank of America Sued by Madoff Trustee

Citigroup Inc.’s Citibank, Bank of America Corp.’s Merrill Lynch unit and five other banks were sued by the trustee liquidating Bernard Madoff’s firm to recover more than $1 billion for the con man’s defrauded customers.

The banks, which include Natixis SA, Fortis Prime Fund Solutions Bank (Ireland) Ltd., ABN Amro Bank NV, Nomura Bank International Plc. and Banco Bilbao Vizcaya Argentaria SA, received money through Madoff feeder funds when they knew, or should have known, that Madoff’s investments were a fraud, the trustee, Irving Picard, said yesterday in a statement.

Picard, who faces a two-year legal deadline that runs out Dec. 11, has filed hundreds of suits in the past month, seeking more than $34 billion from banks, feeder funds, investors and others alleged to have profited from Madoff’s decades-long Ponzi scheme, the biggest in history. So far, Picard has recovered about $2.5 billion for victims of the fraud.

http://www.bloomberg.com/news/2010-12-09/madoff-trustee-picard-sues-citibank-merrill-nomura-banco-bilbao-vizcaya.html
Feb 23, 2011 at 1:46 AM | Registered CommenterDailyBail
Allen Stanford and Bernie Madoff In Same Prison

Accused Ponzi schemer Allen Stanford has joined convicted Ponzi schemer Bernard Madoff at the federal prison complex in Butner, North Carolina.

http://www.cnbc.com/id/41679265
Feb 23, 2011 at 2:00 AM | Registered CommenterDailyBail
Since the SEC had been informed in detail of Madoff's likely ponzi scheme SEVERAL TIMES by Markopolos, so they MUST have had knowledge of this fraudulent act.... how are SEC Officers held financially responsible by Pickard and others?
Feb 23, 2011 at 11:16 AM | Unregistered Commenterthebestofspain
DB--

I emailed you Picard's Citigroup-Madoff complaint. Like the JPM complaint here (it was filed by the same firm and lead counsel), the names of bankers and bank officials have been redacted. But whereas the complaint here seeks more than $5 billion in damages, the complaint against C seeks less than $500 million.
Feb 23, 2011 at 12:05 PM | Unregistered CommenterCheyenne
thanks cheyenne...i'll check my email...
Feb 23, 2011 at 12:25 PM | Registered CommenterDailyBail

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
All HTML will be escaped. Hyperlinks will be created for URLs automatically.