TBO.com - TBO is Tampa Bay Online

Judge Orders Protection For Investors In Alleged Scheme

ADVERTISEMENT

The Associated Press

Published: December 16, 2008

NEW YORK - A federal judge has signed an order saying investors who may have been duped in one of Wall Street's biggest frauds need the protection of the Securities Investor Protection Act.

Judge Louis Stanton also directed that proceedings to liquidate the assets of Bernard L. Madoff Investment Securities LLC be moved to bankruptcy court.

The order was signed Monday afternoon after the Securities Investor Protection Corp. submitted papers asking for the protection for investors.

The list of investors who say they were duped in the scheme is growing, snaring some of the world's biggest banking institutions and hedge funds, the super rich and the famous, pensioners and charities.

The alleged victims who sunk cash into Madoff's investment pool include a trust tied to real estate magnate Mortimer Zuckerman and a charity of movie director Steven Spielberg. The Wall Street Journal reported that the foundation of Nobel laureate Elie Wiesel also took a hit.

Among the world's biggest banking institutions, Britain's HSBC Holdings PLC, Royal Bank of Scotland Group PLC and Man Group PLC, Spain's Grupo Santander SA, France's BNP Paribas and Japan's Nomura Holdings all reported that they had fallen victim to Madoff's alleged Ponzi, or pyramid, scheme.

The 70-year-old Madoff, well-respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested Thursday in what prosecutors say was a $50 billion scheme to defraud investors. Some investors claim they've been wiped out, while others are still likely to come forward.

Reports from Florida to Minnesota included profiles of ordinary investors who gave Madoff their money.

They join a list of more powerful investors that have come forward, all worried about the extent of their losses. The roster of names include former Philadelphia Eagles owner Norman Braman, New York Mets owner Fred Wilpon and J. Ezra Merkin, the chairman of GMAC Financial Services, among others.

Mortimer Zuckerman, the chairman of real estate firm Boston Properties and owner of the New York Daily News and U.S. News & World Report, said his charitable trust, Mortimer B. Zuckerman Charitable Remainder Trust, incurred losses of about $30 million, impacting 11 percent of the value of the trust.

The Journal reported potential investors and firms exposed to the alleged fraud included: Carl Shapiro, founder and former chairman of women's apparel company Kay Windsor Inc.; Bed Bath & Beyond Inc. co-founder Leonard Feinstein; Yeshiva University; EIM Group; UBS AG; Fairfield Greenwich Advisors and Tremont Capital Management.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT