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Who Are Bernard Madoff’s “Feeders”?

June 25, 2009


June 23, 2009 02:41 PM
by Denis Cummings
The SEC has filed fraud charges against “feeders” that made millions by passing their clients’ money along to disgraced financier Bernard Madoff.

Cohmad, Chais Charged With Fraud

The Securities and Exchange Commission on Monday took its first action against the “feeders” to Bernard Madoff’s $65 billion Ponzi scheme, announcing civil fraud charges against one brokerage firm and four individuals.

In two separate lawsuits, the SEC accused brokerage firm Cohmad Securities—specifically its chairman Maurice Cohn, chief operating officer Marcia Cohn and broker Robert Jaffe—and California financial adviser Stanley Chais with “knowingly or recklessly disregarding facts indicating that Madoff was operating a fraud.”

“This is what will be the beginning of a number of lawsuits brought by the trustee and the SEC to recover from the commission feeders the substantial revenue that they earned off the Madoff victims,” said Jerry Reisman, an attorney representing some Madoff investors. “It was this group of money seekers who assisted Madoff to prey off the victims and perpetrate his fraud.”

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