The Joplin Globe, Joplin, MO

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June 22, 2009

<img src=" http://www.joplinglobeonline.com/images/zope/monday.gif" border=0> SEC charges Madoff-linked firm, adviser with fraud

WASHINGTON (AP) — Federal regulators on Monday charged a New York brokerage firm and a California investment adviser with securities fraud, accusing them of funneling billions of dollars from investors into Bernard Madoff’s Ponzi scheme.

The Securities and Exchange Commission announced civil fraud charges against Cohmad Securities, its chairman, Maurice Cohn, chief operating officer Marcia Cohn and broker Robert Jaffe.

Named in a second SEC lawsuit was Los Angeles-based investment adviser Stanley Chais, who allegedly oversaw three funds that invested all of their assets — nearly $1 billion — with Madoff.

Madoff secretly controlled New York-based Cohmad and used it to procure a steady stream of funds for his multibillion-dollar fraud, the SEC said.

While channeling billions in investor funds to Madoff, the associates together collected several hundred million dollars in fees from the now-disgraced money manager, the SEC alleged.

The agency’s lawsuits were filed in federal court in Manhattan. One accuses Cohmad, the Cohns and Jaffe of actively marketing Madoff’s funds to prospective investors “while knowingly or recklessly disregarding” facts that indicated he was running a fraud. A second suit alleges that Chais committed fraud by misrepresenting his role in managing the three funds’ assets and providing account statements to investors that he should have known were false.

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