We need more legal action like this. A lot more: Massachusetts Sues Madoff Feeder Fund for Fraud
Massachusetts’top securities regulator has sued Fairfield Greenwich
Advisors, which directed billions of dollars of its clients’ money into Bernard L. Madoff’s investment firm before it was revealed as a giant Ponzi scheme. The civil complaint alleges that Fairfield’s lack of due diligence and misrepresentations to its investors amounted to fraud.
Claiming that Fairfield was “blinded by the hundreds of millions of dollars it was making off of Madoff,” the lawsuit seeks restitution for all Massachusetts investors who lost money in Fairfield’s Sentry funds.
The W$J story about this (behind the subscription wall, unfortunately) quoted from the complaint against Fairchild. MA has come across recordings of phone calls between Madoff and some luckless Fairchild employee where Madoff gives advice on outwitting the SEC.
I think we all know that Madoff didn't act alone. His family and employees should rightfully be in legal jeopardy right now. But funds like Fairchild must have known Madoff was not running an honest shop. That Madoff was actively working with people at Fairchild to foil the SEC suggests that Madoff's fraud must have been an open secret there, and most likely elsewhere.
The gov't should be bringing the hammer down a lot more, now that so much of America's wealth has been shown to be based on little more than fraud and off-book accounting. While the SEC was going after Martha Stewart over $200,000, there were billion dollar rip offs that were institutions on Wall Street.
This really doesn't need to be a liberal v conservative, regulate v deregulate issue. Order and justice must be restored and the way to do it is through the sort of proceedings that MA has initiated.
