The securities fraud of Bernard Madoff has rocked the Jewish nonprofit world -- and the worst may be yet to come. Madoff, the founder of Bernard L. Madoff Investment Securities LLC, was arrested Dec. 11 after admitting to his board that a hedge fund he ran was essentially a $50 billion Ponzi scheme.
The list of investors who say they were duped in one of Wall Street's biggest Ponzi schemes 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 veteran Wall Street money manager Bernard Madoff's investment pool include real estate magnate Mortimer Zuckerman, the foundation of Nobel laureate Elie Wiesel, and a charity of movie director Steven Spielberg, according to The Wall Street Journal.
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 $50 billion Ponzi, or pyramid, scheme.
The 70-year-old Madoff (MAY-doff), 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.
"There were a lot of very sophisticated people who were duped, and that happens a great deal when you've had somebody decide to be unscrupulous," said Harvey Pitt, a former chairman of the Securities and Exchange Commission, a regulatory agency in charge of monitoring investment funds like the one Madoff operated.
The extent of the potential damage prompted a leading fund manager in London to lash out at U.S. regulators for failing to detect the fraud earlier.
"I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they haven fallen down in the job," Nicola Horlick, the manager of Bramdean Alternatives, which has 9 percent of its funds invested in Madoff's scheme, told the British Broadcasting Corp.
"All through the credit crunch this has been apparent," Horlick added. "This is the biggest financial scandal, probably, in the history of the markets."
Among U.S. investors, the Boston-based Robert I. Lappin Charitable Foundation, a charity that financed trips for Jewish youth to Israel, let go of its staff after revealing that the money for its operations was invested with Madoff.
New Jersey Sen. Frank Lautenberg, one of the wealthiest members of the Senate, entrusted his family's charitable foundation to Madoff. Lautenberg's attorney, Michael Griffinger, said they weren't yet sure the extent of the foundation's losses, but that the bulk of its investments had been handled by Madoff.
Lautenberg's foundation handed out more than $765,000 to at least 100 recipients in 2006, according to the most recent listing on Guidestar, which tracks charitable organization filings.
The foundation helps support a variety of religious, educational, civic and arts organizations in New Jersey and elsewhere, and its contributions range from a gift of more than $300,000 to the United Jewish Communities of MetroWest New Jersey to a $2,000 donation to a children's program at the Hackensack Medical Center.
Reports from Florida to Minnesota included profiles of ordinary investors who gave Madoff their money. Some had been friends with him for decades, others were able to invest because they were a friend of a friend. They told stories of losing everything from $40,000 to an entire nest egg worth well over $1 million.
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.
The Wall Street Journal, citing a person familiar with the matter, said Mortimer Zuckerman, the chairman of real estate firm Boston Properties and owner of the New York Daily News and U.S. News & World Report, had significant exposure through a fund that invested substantially all of its assets with Madoff.
The Journal also said the Steven Spielberg charity, the Wunderkinder Foundation, in the past appears to have invested a significant portion of its assets with Madoff. It said the Elie Wiesel Foundation for Humanity, founded by the famed Holocaust survivor and writer, was hard hit by losses, citing two people familiar with the organization's investments.
Messages were left with the Zuckerman fund and Wunderkinder foundation. The Wiesel foundation said it was looking into the matter.
The Journal also 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; Tremont Capital Management; Maxam Capital Management and Ascot Partners.
Among those overseas confirming exposure on Monday, Banco Santander, the largest bank in the euro zone by market capitalization, said its clients have 2.33 billion euros ($3.07 billion) in exposure with Madoff, mostly through a fund called Optimal Strategic US Equity.
HSBC, Britain's largest bank, said a "small number" of its insitutional clients had exposure totaling some $1 billion in Madoff funds.
It added that it has custody clients who have invested with Madoff, but it did not believe those "custodial arrangements should be a source of exposure to the group."
Royal Bank of Scotland — Britain's second-largest bank, which is now 58 percent owned by the British government — said it could lose around 400 million euros pounds through exposure in trading and collateralized lending to funds of hedge funds invested with Bernard L Madoff Investment Securities LLC.
Man Group, the world's largest publicly traded fund manager that reported exposure of around $360 million on Monday, said "it appears that a systematic and comprehensive fraud may have been committed, evading a range of structural controls."
Japan's Nomura Holdings said it has 27.5 billion yen ($306 million) in exposure, but added that any losses were likely to be limited compared to its capital base.
French banks foresee nearly 1 billion euros in potential losses as indirect victims of the alleged fraud.
Natixis, France's fourth-largest bank, set its maximum indirect exposure at about 450 million euros. A statement by the investment bank said it made no direct investments in hedge funds managed by Madoff. However, it said that some of its clients' money was invested in funds managed by "first class custodians," which in turn entrusted those securities to Madoff's investment securities company.
Both Societe Generale and Credit Agricole said they had "negligible" exposure of below 10 million euros each. However, the euro zone's largest bank, BNP Paribas, has estimated its risk exposure to hedge funds managed by Madoff at up to 350 million euros.
In a statement Sunday, BNP Paribas said it has no investment of its own in Madoff's hedge funds, but "does have risk exposure to these funds through its trading business and collateralized lending to funds of hedge funds."
Swiss bank Union Bancaire Privee indicated it had hundreds of millions of dollars in client assets invested under the management of Madoff. The Geneva bank, one of Switzerland's largest, did not disclose a total amount invested, but did say the exposure of its clients "represents less than 1 percent of the total assets under management of the bank."
UBP's announcement Monday followed weekend disclosures by Swiss banks Reichmuth & Co. of Lucerne, Benedict Hentsch of Geneva and Neue Privat Bank of Zurich that they had millions of dollars worth of client assets at risk in the case.
Unicredit, Italy's largest bank, said its exposure to Madoff's company is about 75 million euros, representing amounts the bank invested directly and not funds belonging to its clients, said spokesman Andrea Moreschi. Unicredit has a separate, indirect exposure through Pioneer Investment, its asset management division.
In Germany, Deutsche Bank AG, Dresdner Bank AG and Commerzbank AG declined to comment on the matter.
On Friday, representatives from major U.S. banks — Bank of America Corp., Citigroup Inc., PNC Financial Services Group Inc. and Merrill Lynch & Co. — declined to comment on whether they had exposure to Madoff's company. Both BlackRock Inc. and Goldman Sachs Group Inc. said they had no exposure.
Morgan Stanley, Wells Fargo & Co., Comerica Inc. and U.S. Bancorp did not return calls seeking comment.
Credit The Associated Press
Monday, December 15, 2008
Sunday, December 14, 2008
George Bush Dodges A Size 10 Shoe
George Bush gave a surprise news conference in Iraq today and was greeted by the size 10 shoes of an Iraqi reporter. It's really important to know that the shoes were a size 10!
The Bush shoe dodge, the president dodges flying shoes in Iraq. - An Iraqi journalist threw two shoes at President George W. Bush at a press conference in Baghdad, Iraq. The reporter that tossed the shoe has been identified by AFP as Muntazer al-Zaidi and at first hurled an insult at the American president and then let fly both shoes, one at a time.
The president showed he is still able to dodge and weave quite well with the shoe toss. The first shoe was heading straight for the head of George W. Bush but he made a quick move to get out of the way. The second shoe only narrowly missed its mark.
Bush laughed it off and the reason we believe it was a size ten shoe is that is exactly how the president describes it. The report from AFP notes that some Iraqi journalists apologized to President Bush but he told them that wasn't necessary.
See the video here. The president was unhurt and told reporters, he was okay and said, "It doesn’t bother me. So what if he threw a shoe at me. All I can report is it is a size 10." Photos here at TMZ. At least he kept his sense of humor.
Credits to National Ledger
The Bush shoe dodge, the president dodges flying shoes in Iraq. - An Iraqi journalist threw two shoes at President George W. Bush at a press conference in Baghdad, Iraq. The reporter that tossed the shoe has been identified by AFP as Muntazer al-Zaidi and at first hurled an insult at the American president and then let fly both shoes, one at a time.
The president showed he is still able to dodge and weave quite well with the shoe toss. The first shoe was heading straight for the head of George W. Bush but he made a quick move to get out of the way. The second shoe only narrowly missed its mark.
Bush laughed it off and the reason we believe it was a size ten shoe is that is exactly how the president describes it. The report from AFP notes that some Iraqi journalists apologized to President Bush but he told them that wasn't necessary.
See the video here. The president was unhurt and told reporters, he was okay and said, "It doesn’t bother me. So what if he threw a shoe at me. All I can report is it is a size 10." Photos here at TMZ. At least he kept his sense of humor.
Credits to National Ledger
Tuesday, November 18, 2008
Lean Cuisine recall affects shoppers in Portland
If you are in to frozen foods you might want to read this! This week Nestle had to recall 3 types of frozen Lean Cuisine chicken meals, primarily in Oregon.
Utah-based Nestle Prepared Foods Company has recalled three varieties of frozen Lean Cuisine chicken meals, two of which were distributed in Oregon.
The entrees might contain small pieces of bright blue plastic, a high health risk, according to the U.S. Department of Agriculture's Food Safety and Inspection Service. Those meals are: Pesto Chicken with Bow Tie Pasta, Chicken Mediterranean and Chicken Tuscan, all produced between August 18 to October 27 and distributed to retail establishments nationwide.
The recall of roughly 1.2 million packages of food impacts Oregon shoppers who bought the products at Portland-area Albertsons stores and Clackamas Safeway stores.
One item -- the Pesto Chicken with Bow Tie Pasta, production code "8280595912" marked "Best Before MAY 2010" -- was not sold in Oregon, according to Nestle spokeswoman Roz O'Hearn.
But the other items were sold in Oregon.
Lean Cuisine Chicken Mediterranean, production code "8231595912" or "8241595912" marked "Best before SEP 2010"; production code "8263595912," "8269595911" or "8274595912," marked "Best before OCT 2010"; and production code "8291595912" or "8301595912" marked "Best before NOV 2010," were distributed locally at Albertsons in Portland and Safeways in Clackamas.
Lean Cuisine Chicken Tuscan, production code "8234595911" and marked "Best before SEP 2009"; production code "8253595911" or "8269595912" and marked "Best before OCT 2009"; and production code of "8292595911" or "8296595911" and marked "Best before NOV 2009," were distributed to Safeways in Clackamas.
Each package bears the USDA mark of inspection as well as the establishment number "EST P-9018."
Source: Oregon News
Utah-based Nestle Prepared Foods Company has recalled three varieties of frozen Lean Cuisine chicken meals, two of which were distributed in Oregon.
The entrees might contain small pieces of bright blue plastic, a high health risk, according to the U.S. Department of Agriculture's Food Safety and Inspection Service. Those meals are: Pesto Chicken with Bow Tie Pasta, Chicken Mediterranean and Chicken Tuscan, all produced between August 18 to October 27 and distributed to retail establishments nationwide.
The recall of roughly 1.2 million packages of food impacts Oregon shoppers who bought the products at Portland-area Albertsons stores and Clackamas Safeway stores.
One item -- the Pesto Chicken with Bow Tie Pasta, production code "8280595912" marked "Best Before MAY 2010" -- was not sold in Oregon, according to Nestle spokeswoman Roz O'Hearn.
But the other items were sold in Oregon.
Lean Cuisine Chicken Mediterranean, production code "8231595912" or "8241595912" marked "Best before SEP 2010"; production code "8263595912," "8269595911" or "8274595912," marked "Best before OCT 2010"; and production code "8291595912" or "8301595912" marked "Best before NOV 2010," were distributed locally at Albertsons in Portland and Safeways in Clackamas.
Lean Cuisine Chicken Tuscan, production code "8234595911" and marked "Best before SEP 2009"; production code "8253595911" or "8269595912" and marked "Best before OCT 2009"; and production code of "8292595911" or "8296595911" and marked "Best before NOV 2009," were distributed to Safeways in Clackamas.
Each package bears the USDA mark of inspection as well as the establishment number "EST P-9018."
Source: Oregon News
Online retail spending slows to a crawl in October
Consumer spending on e-commerce sites grew just 1 percent during October compared with the same month a year ago, according to ComScore.
In fact, last month was the worst growth month for online retail spending since ComScore began keeping track in 2001.
Rising prices and unemployment rates, and the psychological impact of the chaos of the financial markets are to blame, according to ComScore Chairman Gian Fulgoni.
But the dip in spending can't be too much of a shock to those who watch ComScore's monthly reports carefully. The preceding six months featured declining growth rates--April saw 15 percent growth, and by August spending online had increased just 8 percent.
Spending has dropped off the most for households that make below $50,000 per year, according to ComScore's figures. From August to October this year, their spending dropped 3 percent compared with the same period last year. For households making between $50,000 and $100,000, their spending increased 1 percent. Households making more than $100,000 increased their spending during that time by 14 percent.
Retailers both online and off are fretting how the economic downturn will affect this year's holiday sales. E-commerce giants Amazon.com and eBay both offered dim holiday outlooks during their third-quarter earnings reports.
In response, earlier this month ComScore recommended that online retailers should seriously consider generous coupon offers and free shipping to encourage consumers to spend in the coming months.
Source: CNET NEWS
In fact, last month was the worst growth month for online retail spending since ComScore began keeping track in 2001.
Rising prices and unemployment rates, and the psychological impact of the chaos of the financial markets are to blame, according to ComScore Chairman Gian Fulgoni.
But the dip in spending can't be too much of a shock to those who watch ComScore's monthly reports carefully. The preceding six months featured declining growth rates--April saw 15 percent growth, and by August spending online had increased just 8 percent.
Spending has dropped off the most for households that make below $50,000 per year, according to ComScore's figures. From August to October this year, their spending dropped 3 percent compared with the same period last year. For households making between $50,000 and $100,000, their spending increased 1 percent. Households making more than $100,000 increased their spending during that time by 14 percent.
Retailers both online and off are fretting how the economic downturn will affect this year's holiday sales. E-commerce giants Amazon.com and eBay both offered dim holiday outlooks during their third-quarter earnings reports.
In response, earlier this month ComScore recommended that online retailers should seriously consider generous coupon offers and free shipping to encourage consumers to spend in the coming months.
Source: CNET NEWS
Goodbye Circuit City
When Circuit City announced on Monday that it was closing 155 stores amid financial trouble, it didn't surprise me at all. If you've been following this page over the past year and a half, you know that I've been saying since the beginning that Circuit City doesn't have the chops to stick around and compete with Best Buy.
Circuit City (Credit: Circuit City)
And although yesterday's announcement was probably a shock to some at the company, it shouldn't have been. For the past few years, Circuit City has been the victim of one of the steepest declines this industry has ever seen.
Right now, the stock is in danger of being delisted from the New York Stock Exchange, thanks to a share price that can't make its way above the $1 mark. In fact, even after announcing the closure of 155 stores, the company's shares rose only 10 cents in daytime trading, bringing its stock price to 36 cents per share.
We can't forget, upon analyzing Circuit City, that this isn't the end of store closures, nor the beginning of financial success. The company is now going to engage landlords in negotiations to "aggressively" reduce rental rates in stores nationwide.
Once that initiative fails--and it will--Circuit City will have no other option but to close even more stores as it tries to find the right balance between size and financial stability.
To make matters worse, it will be delisted from the NYSE. I simply don't see any way the stock price can gain almost 70 cents in a short amount of time to get regulators off the company's back. And once that happens, any influx of cash Circuit City was hoping for will be lost, and it will be forced to close even more stores.
The end is near for Circuit City. Its decision to close 155 stores was an opening salvo in the hopes that shareholders would take notice and believe the company had the ability to turn things around.
Unfortunately for Circuit City, the shareholders didn't fall for it.
The company may be an attractive target for at least one company in the industry. After all, CompUSA was picked up by TigerDirect, and now some CompUSA stores are open in Florida.
But then again, maybe Circuit City isn't as attractive to acquiring companies as it wants to believe. Maybe companies realize that Circuit City is a dog and will never be able to compete with Best Buy in brick-and-mortar stores or Amazon.com online. Maybe they realize that with a stock that's in serious danger of being delisted, it has no hope of repairing shareholder confidence. And maybe they realize that Circuit City's days are numbered, regardless of the amount of cost cutting and expense slashing in which the company engages.
I've said it once, and I'll say it again: Circuit City is a dying company with no viability to, well, anyone. With Best Buy and online retailers squeezing it out of the market, I honestly don't believe that Circuit City will be around even a year from now. Strapped for cash, facing an avalanche of competition, and in desperate need of solid revenue, Circuit City looks like company that simply can't survive in today's hotly contested environment.
The game is over. And Circuit City lost.
Source: CNET NEWS
Circuit City (Credit: Circuit City)
And although yesterday's announcement was probably a shock to some at the company, it shouldn't have been. For the past few years, Circuit City has been the victim of one of the steepest declines this industry has ever seen.
Right now, the stock is in danger of being delisted from the New York Stock Exchange, thanks to a share price that can't make its way above the $1 mark. In fact, even after announcing the closure of 155 stores, the company's shares rose only 10 cents in daytime trading, bringing its stock price to 36 cents per share.
We can't forget, upon analyzing Circuit City, that this isn't the end of store closures, nor the beginning of financial success. The company is now going to engage landlords in negotiations to "aggressively" reduce rental rates in stores nationwide.
Once that initiative fails--and it will--Circuit City will have no other option but to close even more stores as it tries to find the right balance between size and financial stability.
To make matters worse, it will be delisted from the NYSE. I simply don't see any way the stock price can gain almost 70 cents in a short amount of time to get regulators off the company's back. And once that happens, any influx of cash Circuit City was hoping for will be lost, and it will be forced to close even more stores.
The end is near for Circuit City. Its decision to close 155 stores was an opening salvo in the hopes that shareholders would take notice and believe the company had the ability to turn things around.
Unfortunately for Circuit City, the shareholders didn't fall for it.
The company may be an attractive target for at least one company in the industry. After all, CompUSA was picked up by TigerDirect, and now some CompUSA stores are open in Florida.
But then again, maybe Circuit City isn't as attractive to acquiring companies as it wants to believe. Maybe companies realize that Circuit City is a dog and will never be able to compete with Best Buy in brick-and-mortar stores or Amazon.com online. Maybe they realize that with a stock that's in serious danger of being delisted, it has no hope of repairing shareholder confidence. And maybe they realize that Circuit City's days are numbered, regardless of the amount of cost cutting and expense slashing in which the company engages.
I've said it once, and I'll say it again: Circuit City is a dying company with no viability to, well, anyone. With Best Buy and online retailers squeezing it out of the market, I honestly don't believe that Circuit City will be around even a year from now. Strapped for cash, facing an avalanche of competition, and in desperate need of solid revenue, Circuit City looks like company that simply can't survive in today's hotly contested environment.
The game is over. And Circuit City lost.
Source: CNET NEWS
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