Cohmad Securities

Maurice "Sonny" Cohn owned 48% of Cohmad, and his daughter Marcia, who served as president and chief compliance officer, owned 25%. Madoff owned 15%. Mr. Madoff's brother, Peter owned 9%, Mr. Cohn's brother owned 1%, and another unnamed Cohmad employee owned 1%.{{cite news| url=https://www.wsj.com/articles/SB124568875235837661#articleTabs%3Darticle | work=The Wall Street Journal | title=SEC Files Fraud Charges Against Cohmad, Co-Founder in Madoff Case | date=June 23, 2009 | first1=Kara | last1=Scannell | first2=Robert | last2=Frank}} Cohmad received $67 million in generated fees from Madoff investments, from 2000–2008.{{cite news| url=https://www.wsj.com/articles/SB123940737747310069 | work=The Wall Street Journal | title=Feeder Fees Topped $790 Million | date=April 11, 2009 | first=Tom | last=Lauricella}}

The brokerage firm lists its address as Madoff's firm's address in New York City. Cohmad employs Robert Jaffe, as vice-president.{{cite news|last1=Frank|first1=Robert|last2=Lauricella|first2=Tom|last3=Lucchetti|first3=Aaron |title=Cohmad, Jaffe Draw Closer Look|url=https://www.wsj.com/articles/SB123189380284379481 |access-date=12 January 2018|work=The Wall Street Journal [online]|date=14 January 2009 }} Jaffe is married to Ellen Shapiro, daughter of Boston philanthropist Carl J. Shapiro, the founder and former chairman of apparel company Kay Windsor Inc. and an early investor and close friend of Madoff. Jaffe reportedly convinced the elder Shapiro to invest $250 million with Madoff just 10 days before Madoff's arrest.{{cite web|url=http://www.palmbeachpost.com/localnews/content/local_news/epaper/2008/12/20/a1a_jaffe_1221.html|title="Jaffe Tarnished as Feds Investigate Madoff", Palm Beach Post (December 20, 2008)}}

Cohmad had fewer than 650 client accounts, and made 99.7% of its sales from brokerage services to Madoff's larger broker-dealer. In its audited financial statements for the 12 months ending June 30, 2008, Cohmad said revenue from Madoff Securities totaled $3,736,829. Its total sales for the same period were $3,748,397.{{cite web|url=http://www.muckety.com/Cohmad-Securities/5058711.muckety|title=Cohmad Securities at Muckety.com|access-date=February 27, 2009|archive-url=https://web.archive.org/web/20090321100955/http://www.muckety.com/Cohmad-Securities/5058711.muckety|archive-date=March 21, 2009|url-status=dead|df=mdy-all}}

Jaffe, a philanthropist, "worked the Palm Beach, Florida circuit" and "attracted many Palm Beach Country Club members as investors."{{cite news | last =Frank | first =Robert |author2=Peter Lattman |author3=Dionne Searcey |author4=Aaron Lucucchetti | title =Fund Fraud Hits Big Names; Madoff's Clients Included Mets Owner, GMAC Chairman, Country-Club Recruits | work =The Wall Street Journal | date =December 13, 2008 | url =https://www.wsj.com/articles/SB122914169719104017?mod=djemalertNEWS | access-date =December 13, 2008}} Jaffe brought in 150 accounts and more than $1 billion to Madoff. Madoff paid Jaffe directly through accounts he kept with Madoff at much higher returns than those earned by other investors. Between 1996 and 2008, Jaffe withdrew at least $150 million, and the SEC claims he was aware Madoff was engaged in fictitious trading. Jaffe has said he received a commission of 1% to 2% from an investor's first profit, and he paid commissions to financial advisers who steered cash to Madoff's fund.{{cite news|url=http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5562935.ece |archive-url=https://web.archive.org/web/20110612101142/http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5562935.ece |url-status=dead |archive-date=June 12, 2011 |title=Madoff associate skips court hearing – Times Online |work=The Times |date= January 21, 2009|access-date=April 26, 2009 | location=London | first=Christine | last=Seib}}{{cite web |url=http://news.muckety.com/2009/01/15/cohmad-securities-robert-jaffe-face-tough-questions-about-madoff-ties/10151 |title=Cohmad Securities, Robert Jaffe face tough questions about Madoff ties | Muckety.com – See the news |publisher=News.muckety.com |access-date=April 26, 2009 |archive-url=https://web.archive.org/web/20090430120644/http://news.muckety.com/2009/01/15/cohmad-securities-robert-jaffe-face-tough-questions-about-madoff-ties/10151 |archive-date=April 30, 2009 |url-status=dead |df=mdy-all }}

On January 14, 2009, William Galvin, Massachusetts Secretary of the Commonwealth, who is in charge of the state's securities issues, filed suit against Jaffe, a Cohmad broker for Madoff, who promoted Madoff's funds to wealthy investors in Massachusetts and Florida.{{cite web|url=http://www.bostonherald.com/business/general/view/2009_01_15_William_Galvin_sues_salesman_Robert_Jaffe:_Demands_testimony/srvc=business&position=recent_bullet|title="William Galvin Sues Salesman Robert Jaffe – Demands Testimony", Boston Herald (January 15, 2009)}} On February 4, compelled to testify, Jaffe invoked his Fifth Amendment right. Marcia Cohn, Maurice Cohn and Alvin Delaire, Jr. failed to appear. On February 11, 2009, Galvin filed a complaint{{Cite web |url=http://www.sec.state.ma.us/sct/sctcohmad/cohmad_complaint.pdf |title=Archived copy |access-date=February 27, 2009 |archive-date=February 25, 2009 |archive-url=https://web.archive.org/web/20090225211040/http://www.sec.state.ma.us/sct/sctcohmad/cohmad_complaint.pdf |url-status=dead }} seeking to revoke the Massachusetts license of Cohmad Securities Corp., an accounting of all Massachusetts investors Cohmad referred to Madoff’s company, all the fees it earned doing so (more than $67 million), and a fine. It named Ruth Madoff as having withdrawn $10 million on December 10, 2008 and $5.5 million on November 25, 2008 from her brokerage account. It also cited $526,000 in referral fees paid from Madoff Investments, to Cohmad, to Vienna Bank Medici majority owner, Sonja Kohn, which she subsequently denied.{{cite news| url=https://www.reuters.com/article/marketsNews/idUSLC60093820090212 | work=Reuters | title=Medici's Kohn says did not get Madoff payments | first=Boris | last=Groendahl | date=February 12, 2009}}{{cite news| url=http://www.boston.com/business/ticker/2009/02/galvin_seeks_to.html | work=The Boston Globe | title=Galvin seeks to shut down firm with Madoff ties | date=February 11, 2009}} On May 28, 2009, Bank Medici lost its Austrian banking license. Kohn and the Bank are under investigation.{{cite news| url=https://www.wsj.com/articles/SB124351941925862619 | work=The Wall Street Journal | title=Madoff-Hit Bank Medici Loses License | date=May 28, 2009 | first=Flemming E. | last=Hansen}}

On May 8, 2009, the Commonwealth of Massachusetts found the firm to be in “default” for not assisting regulators. Cohmad’s securities registration has been revoked, and they must provide an accounting of all fees the company or its agents earned for referring Massachusetts investors to Mr. Madoff's firm as well as, pay a $100,000 fine for failing to cooperate with the state securities investigation.{{cite news| url=https://www.wsj.com/articles/SB124179163909400903 | work=The Wall Street Journal | title=Madoff-Tied Brokerage Loses Its Registration | date=May 9, 2009 | first=Robert | last=Frank}}

On March 15, 2009, Federal prosecutors filed a notice in federal court declaring its intent to seek the forfeiture of the Madoffs' interests in Cohmad Securities.{{cite news| url=http://dealbook.blogs.nytimes.com/2009/03/16/government-files-notice-seeking-madoff-assets/?hp | work=The New York Times | title=Government Files Notice Seeking Madoff Assets | date=March 16, 2009 | access-date=April 30, 2010}}

On June 22, 2009, Madoff Trustee, Irving Picard filed a claim against Cohmad, founder Maurice “Sonny” Cohn, daughter Marcia Cohn, Robert Jaffe, Richard Spring, Alvin J. Delaire, Jr., Stanley Mervin Berman, Jonathan Greenberg, Cyril Jalon, Morton Kurzrok, and Rosalie Buccellato, among more than two dozen individuals and trusts in U.S. Bankruptcy Court in New York.{{Cite web |url=http://www.nylj.com/nylawyer/adgifs/decisions/062309cohmad.pdf |title=Archived copy |access-date=June 24, 2009 |archive-date=December 29, 2009 |archive-url=https://web.archive.org/web/20091229223951/http://www.nylj.com/nylawyer/adgifs/decisions/062309cohmad.pdf |url-status=dead }} The lawsuit claims that up to 90 percent of Cohmad’s income came from referring clients and that the firm had a “symbiotic” relationship with Madoff, having earned hundreds of millions of dollars from the fraud. The lawsuit seeks more than $100 million paid to Cohmad six years prior to Madoff’s firm declaring bankruptcy, and more than $105 million in profits Cohmad employees and their families withdrew from the investment accounts they held with Madoff.

On June 22, 2009, the U.S. Securities and Exchange Commission (SEC) also filed civil fraud charges

{{cite news| url=https://www.wsj.com/public/resources/documents/cohmadcomplaint20090622.pdf | work=The Wall Street Journal}} against co-founder Maurice "Sonny" Cohn, president Marcia Cohn, and Robert Jaffe. The lawsuit alleges the company was Madoff's "in-house marketing arm" and critical to Madoff's scam. Cohmad representatives were paid for funds they brought into the firm but not for any putative increase in the investments' value. Withdrawals were treated as a loss, which "suggested that profits generated by Madoff were fictitious", although Madoff changed the arrangement in 2002 for Maurice Cohn, and began paying him $2 million a year.

Jaffe has filed requests with the Courts to dismiss the SEC and the Picard cases. The cases are Picard v. Cohmad Securities Corp., 09-AP- 1305, U.S. Bankruptcy Court, Southern District of New York (Manhattan), and SEC v. Cohmad, 09-cv-5680, U.S. District Court, Southern District of New York.).{{cite news| url=https://www.bloomberg.com/apps/news?pid=20601103&sid=a81_r.GbN1_4 | work=Bloomberg | title=Cohmad's Jaffe Seeks Dismissal of SEC, Picard Counts (Update1) | date=August 21, 2009}}

• List of investors in Bernard L. Madoff Securities

{{reflist|2}}

• [https://web.archive.org/web/20090225211040/http://www.sec.state.ma.us/sct/sctcohmad/cohmad_complaint.pdf Commonwealth of Massachusetts Secretary of State Complaint], January 14, 2009
• [https://web.archive.org/web/20091229223951/http://www.nylj.com/nylawyer/adgifs/decisions/062309cohmad.pdf Picard v. Cohmad Securities Corp. 09-AP-1305], June 22, 2009
• [https://www.wsj.com/public/resources/documents/cohmadcomplaint20090622.pdf, SEC v. Cohmad Securities Corp., 09 Civ. 5680], June 22, 2009

{{Madoff investment scandal}}

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