Madoff's assets to be kept secret

Madoff's assets to be kept secret

David Scheer
January 2, 2009
THE US Securities and Exchange Commission, which sued Bernard Madoff last month for allegedly directing a $US50 billion ($71 billion) fraud, is to withhold public access to a list of his assets filed on Wednesday.

A federal judge ordered Madoff to provide the commission with an account of all investments, loans, lines of credit, business interests, brokerage accounts and other holdings. The court

did not authorise its public disclosure, said a commission spokesman, Andrew Calamari, who confirmed receipt of the list.

"I think one of the fears here is that much of this money may be in offshore funds," said Professor John Coffee, of Columbia Law School, adding the commission wanted to keep the assets secret to protect them. "There is the danger that foreign regulators and foreign creditors may seek to seize that money if the names and sources are made public."

Madoff was charged last month by federal prosecutors with directing an alleged Ponzi scheme through his New York investment firm. His lawyer, Ira Sorkin, has said Madoff's company is co-operating with the Government.

Shortly before he was arrested, Madoff allegedly told employees that he had $US200 million to $US300 million left, according to an FBI complaint. Mr Sorkin declined to comment on the amount of Madoff's remaining assets.

Madoff's firm collapsed after he was arrested on December 11. He told his sons that he directed the Ponzi scheme, in which old investors are paid off with money from new ones.

The firm is in liquidation under the Securities Investor Protection Corporation.

The list of Madoff's assets may be attractive to his investors, including hedge funds, celebrities, universities and charities, as they sue to recover their money. His advisory business could have had more than 4000 customers, investigators said.

Losses disclosed by some clients could have been inflated by gains held in their accounts with Madoff.

Yeshiva University, which had valued its holdings with Madoff at $US110 million, said this week its net investment was about $US14.5 million before inflation by "fictitious" profits.

Bloomberg