A Chilling Glimpse Inside a Madoff Feeder Fund

[Liberal_in_LA]

A Chilling Glimpse Inside a Madoff Feeder Fund

http://abcnews.go.com/Blotter/story?id=7233345&page=1

Fairfield Greenwich Group: 'This Conversation Never Took Place,' Bernie Madoff Told One Fairfield Executive, Per Court Documents

By RICHARD ESPOSITO
April 2, 2009

The clearest look to date of the relationship between Bernard Madoff and his feeder funds, one of which netted hundreds of millions in fees and which authorities say exposed investors to undisclosed risks, is put forth in new court documents filed by the Massachusetts Secretary of State, William Galvin.

The Massachusetts Secretary of State alleges the Fairfield Greenwich Group, founded by Walter Noel, right, knowingly misrepresented to its investors what it knew about Bernard Madoff's, left, Ponzi scheme operation and asserted it performed a level of due diligence that it did not actually perform.

One potentially damning accusation made by Galvin was that principals at the Fairfield Greenwich Group discussed among themselves the risk that Madoff would "blow up" and was aware of the gaps in its knowledge of Madoff's operation.

However, Galvin alleges Fairfield did not disclose those concerns to investors. Fairfield Greenwich, founded by Walter Noel, has been accused of fraud by Galvin who says the firm knowingly misrepresented to its investors what it knew about Madoff's operation and asserted it performed a level of due diligence that it did not actually perform.

The court papers detail a December 2005 telephone conversation that allegedly took place between Fairfield executives and Madoff in which Madoff counsels them on how to manage their conversation with the regulators when it comes to describing what they know about Madoff's operation.

[elehhhhna]

1. This juicy Vanity Fair (April) article on the Noels might be of interest:

http://www.vanityfair.com/style/features/2009/04/noel200904

[Liberal_in_LA]

2. really interesting article. Reading it now