New York City – Chairman of Yeshiva University Business School Arrested For Securities Fraud


    Mr. is teh chairman of Sy Syms School of Business for Yeshiva UniversityNew York City – On Wall Street, his name is legendary. With money he had made as a lifeguard on the urban beaches of Long Island, he built a trading powerhouse that had prospered for more than four decades. At age 70, he had become an influential spokesman for the traders who are the hidden gears of the marketplace.

    But on Thursday morning, this consummate trader, Bernard L. Madoff, was arrested at his Manhattan home by federal agents who accused him of conducting a multibillion-dollar fraud scheme — perhaps the largest in Wall Street’s history.

    Regulators have not yet verified the scale of the fraud. But the criminal complaint filed against Mr. Madoff on Thursday in federal court in Manhattan reports that he estimated the losses at $50 billion.

    “We are alleging a massive fraud — both in terms of scope and duration,” said Linda Chatman Thomsen, director of the enforcement division at the Securities and Exchange Commission. “We are moving quickly and decisively to stop the fraud and protect remaining assets for investors.”

    Andrew M. Calamari, the associate director of enforcement in the S.E.C.’s regional office in New York, said the case involved “a stunning fraud that appears to be of epic proportions.”

    According to his lawyers, Mr. Madoff was released on a $10 million bond. “Bernie Madoff is a longstanding leader in the financial services industry,” said Daniel Horwitz, one of his lawyers. “He will fight to get through this unfortunate set of events.”

    Mr. Madoff’s brother and business colleague, Peter Madoff, declined to comment on the case or discuss its implications for the Madoff investment firm, which at one point was the largest market maker on the electronic Nasdaq market, regularly operating as both a buyer and seller of a host of widely traded securities. The firm employed hundreds of traders.

    There was some worry on Wall Street that Mr. Madoff’s fall would shake more foundations than his own.

    According to the most recent federal filings, Bernard L. Madoff Investment Securities, the firm he founded in 1960, operated more than two dozen funds overseeing $17 billion.

    These funds have been widely marketed to wealthy investors, hedge funds and other institutional investors for more than a decade, although an S.E.C. filing in the case said the firm listed 11 to 23 clients.

    At the request of the Securities and Exchange Commission, a federal judge appointed a receiver on Thursday evening to secure the Madoff firm’s overseas accounts and warned the firm not to move any assets until he had ruled on whether to freeze the assets.

    A hearing on that request is scheduled for Friday.

    Regulators said they hoped to have a clearer picture of the losses facing investors by that court hearing.

    “We have 16 examiners on site all day and through the night poring over the records,” said Mr. Calamari of the S.E.C.

    The Madoff funds attracted investors with the promise of high returns with low fees. One of Mr. Madoff’s more prominent funds, the Fairfield Sentry fund, reported having $7.3 billion in assets in October and claimed to have paid more than 11 percent interest each year through its 15-year track record.

    Competing hedge fund managers have wondered privately for years how Mr. Madoff generated such high returns, in bull markets and bear, given the generally low-yielding investment strategies he described to his clients.

    “The numbers were too good to be true, for too long,” said Girish Reddy, a managing director at Prisma Partners, an investment firm that invests in hedge funds. “And the supporting infrastructure was weak.” Mr. Reddy said his firm had looked at the Madoff funds but decided against investing in them because their performance was too consistently positive, even in times when the market was incredibly volatile.

    But the essential drama is a personal one — one laid out in the dry language of a criminal complaint by Lev L. Dassin, the acting United States attorney in Manhattan, and a regulatory lawsuit filed by the S.E.C. According to those documents, the case came to light on Wednesday when Mr. Madoff told two senior employees at the firm that his money-management unit was “all just one big lie” and “basically, a giant Ponzi scheme.”

    By this account, Mr. Madoff said that he intended to surrender to authorities in about a week but first wanted to distribute approximately $200 million to $300 million to “certain selected employees, family and friends.”

    On Thursday morning, he was arrested on a single count of securities fraud, which carries a maximum penalty of 20 years in prison and a maximum fine of $5 million.

    Mr. Madoff is currently on the board of Nasdaq OMX Group, formerly the Nasdaq Stock Market, and serves as the chairman of the Sy Syms School of Business at Yeshiva University. His son Mark Madoff served as the vice chairman of the board of directors of the National Association of Securities Dealers, from 1993 to 1994 and was also an board member of brokerage firm A.G. Edwards.

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      • What kind of ridiculous comment is that? Is he the Chairman of the Board? Yes. Did he allegedly act perpetrate unethical acts? Yes. Is there reason to think that Yeshiva University had knowledge of his allegedly improper actions? His position on the board is by no means indicative of the philosophy or moral compass of YU, it’s faculty, staff, and students.

      • well, compared to the other
        practices of YU, yes it’s pretty
        ethical.. I just know of 2 that
        make the above seem like a true act of chesed..
        l) the club for deviants – (I know, I know all of you leftist
        are calling me the worst names
        and I want to thank you for that ) which if the YU wouldn’t allow they would be cut off from some funding from the govt….that’s the sad state of our govt.
        2) the man who came back as a women (or is it visa-versa) after summer vacation and continues to “teach” there. all his/her students are thrilled to have him/her back “because he/she is such a wonderful question? what in heavens name are they teaching in YU??

        • I don’t see any relevance in your comment regarding that Professor. First, “all” of the students are not thrilled to have this professor back. Second, did it occur to you that their hands are tied in many respects? When any institution says that they do not discriminate on the grounds of x, y, and z, those are binding terms. If they did not allow the professor to return they would be hit with a tremendous law suit, entangled in judicial issues that would last for ages and propel YU into even more of a public eye, on a broader scale.

      • dont b;ame YU for this. This is not YU this is someone who did this on their own. shame on you to say this is ethical YU. Yu is ethical and has never been in any scandal like this as opposed to other yeshivas

      • The Penalty for this one, is only 20 years in jail and only 5 Million in fines.

        Sounds like a good crime-business to perpetrate a fraud of 50 Billion and have a penalty of only 5 million!

        Crime Does Pay! And it pays very well.

        Whears Rubashkin is not facing such a penalty of 5 Million. Rubashkin is facing fines of many 10s of millions of dollars and if convicted is facing not 20 years of Jail but about 60 years of Jail.

        Someone who is 70 Years Old will be more than 90 if he lives that long to finish his 20 year term and is not likely to have to serve Jail as a 80 or 90 year old.

        They don’t have respirators and nursing home care in Jail.

        He is also to old to be on the run and if he does run he is so old that it’s too easy to catch and old man (old men can run so well as young men).

        Sholom Rubashkin is facing more than 60 years of Jail (at least) and is young enough to be on the run and will live long enough to be able to serve all 60 years in Jail if convicted.

        • i believe they charged him with just one count of fraud in order to arrest him and begin poring through company records. when all is said and done there will likely be numerous additional charges.

    1. Didn’ YU just have a forum about enforcing hechsher tzedek?
      Maybe a forum on following choshen mishpat and not making a chilul Hashem!!
      We all make mistakes but be consistant and don’t be a hypocrite!!
      Waiting for the hechsher tzedek people to emerge with a statement.

      A YU lamdin.

      • You cannot possibly blaming the earnest, misguided young students and teachers at R’ Yitzchak Elchanan for a fraud perpetrated by the businessman chairman of the sister business school (which fooled everyone). THat would be like blaming the bais medrash bochurim and kollel yungeleit at Chafetz Chaim Forest Hills for fraud commited by some wealthy businessman who happens to be the chairman of the board at chafetz chaim Brooklyn (a comparison, did not really happen!).

        If you disagree with the hechsher tzedek nonsense, fine. But one has NOTHING to do with the other!

        I personally learned in Lakewood, but I would give more credit to the talmidim in YU; call yourself a JTS lamdin.

    2. is anyone else noticing a trend—major events and catastrophes knocking things down left and right? i feel like the light of Hashem is peeking through with a bit more power than usual. it seems to be getting more and more intense and it should be opening our eyes….lets pay attention!

    3. Hmmm, a day after they hosted “Ethics and kashrus”. Business ethics at rubashkins deems them treif acording to the Uri L’Tzedek weirdo right?

      So YU officials have fraudulent practices, so according to HIS logic, YU is Treif!!!!!!

      see my friends, Hechsher Tzedek and Uri LTzedek will fall because theyre not Torah, only Torah lasts.

      oh the irony 🙂

    4. Me meg zich shehmen>
      We just finished weeks of Achdus (Mumbai) and now we start bashing YU. Whats your Heter.
      If you cant say anthing nice, say nothing at all.
      Gut shabbos

    5. I mean do you want to tell me that the guy making 600 dollars a week has more money then this billionares what evreyday you hear another billionare never had a penny just scams and lies

    6. This has nothing to do with YU. He just happens to be on the board, he (may have) commited the crime, but not YU.

      Stop trying to yell at YU b/c you can’t stand the fact that bachurim with nitted yalmukas are better off (in learning and certainliny in midot) then the ones with velvet yalmukahs!

      • Well said . This has nothing to do with YU. His crediential prior to this discovery were sterling. He was on board of NASDAQ!! If they kept him you cold have a legitimate gripe, but I am sure they won’t. YU is on the one yeshiva I know that teaches their students not to steal (i.e, they teach them how to earn an honest living. Note the talmud explicityly states that if one does not teach his child how to make a living he is teaching him to steal (e.g. WIC, Section 8, avoiding sales tax, food stamps, etc. etc.!!)

        • in the yeshivos they teach nezikin heavy indotcrination to be honest your curricullum includes some unsavory topics including officially unsavory clubs and individuals

    7. Not trying to knock anyone in particular. However, it hurts to see Modern Orthodox try to sterotype Orthdox Jews a certain way and wish the goveerment success against a fellow Jew, while they themselfs are not better. There are shady people all over, but we must love our fellow Jew regardless what they did. We are Jews first, like brothers who will protect each other even when they may not deserve it otherwise.

    8. This story will probably rank up there close to Enron and Lehman Brothers, there are investors with 10s of millions of dollars with this firm. I dont understand where the accountants and auditors were. This is so much bigger than Wextrust its baffling. You couldnt even invest there unless you knew someone.

    9. the difference between YU and the Charedi community is how the man will be defended. YU will kick him off his board and will not defend him publicly. You cannot read a YU forum and see anybody saying his actions were defensible.
      In cases like Rubashkin or Jacobowitz, their Chasidic defenders complain its anti-semitism and that the crimes they commit are absolved by the tzedakah the people gave.

    10. I am certain that he had no intention of defrauding anybody. Unfortunately, the market turned against him, and he wasn’t able to recoup his losses. He probably tried to trade his way out of it but, eventually, his losses spiraled out of control.
      Let’s all have rachmones on him.

    11. The deeper understanding of this problem, and the general worsening of the economy is that people think the financial markets are a source of money. They are not. They only pass money from one hand to another, but do not grow the economy as a whole.

      The emphasis for Jewish kids has got to get back to science, technology, and engineering, where we take G-d’s raw materials from the ground, use ingenuity, add value and develop new, useful and exciting products and cures.

      Technology, manufacturing and agriculture are really what drives the economy.

      Unfortunately, in the Yeshivas, science and engineeering are viewed with disdain, or completely ignored, thus leaving people with no options other than to “invest”. But investments are worthless unless there is actual technology behind the companies.

      We do our kids a great disservice when we tell them they need no science skills, and if need be can always “go into business” or “invest”. In fact, many of these investments are backed by nothing but air, as we see with the fancy bundled mortgage securities, and now this.

      Let us realize what we need to do to promote real economic growth.

    12. Hopefully he didn’t take YU’s money. Or they’ll be left with a lot more than a $24 million deficit. This man has destroyed the lives of many people. $50 Billion dollars is a lot of life savings and retirement funds. People can’t start over from scratch at age 85. When he knew his scam was collapsing he held off to give $200-300 million dollars to his friends and family.

      His max. fine is $5 million? Is he liable for civil damages also? I hope they throw the book at this guy.

      Rot in jail scum bag!

    13. It’s interesting to note that no one is crying about antisemitism here. And no one is running to Madoff’s defense claiming this is an SEC/Taxi and Limo Commission/Jimmy Hoffa/Santa Clause conspiracy against a wealthy Jew who has given millions and millions to charity. Where is the outcry? Where are the accusations?

      Truth be told, like it or not, Modern is the new Frum, and Black Hat / Chareidi / Flakewood / Chaddidish is the new Krum. There is barely a minyan left of bnei Torah on the derech haTorah al pi Moshe MiSinai.

    14. YU just had a forum promoting Hechsher Tzedek, and bashing Rubashkin’s. 50 BILLION Dollar fraud. YU Chairman admitted. What a Chillul Hashem! Enjoy the just desserts. What goes around comes around. What do all of you self righteous individuals(especially the YU crowd) have to say now? He admitted to the crime and was free on bail, while Sholom Rubashkin pleaded not guilty and is seen as a flight risk. It seems one is Jewish and can run to Israel, which makes the Chairman the Eiruv Rav?

      • YU has more to answer for then that. what about the clubs for deviants that are allowed? what about the sex-change teacher that the students have no problem with
        and who knows what else that goes on that the public will never know…. they should just
        take off the Yeshiva part of their name… and be like all universities, liberal, tolerant ( no beliefe in G-D) and atheistic… everyting and anything is o.k. except the fear that their is a Ruler in Heaven.

        • I always find it humorous to see quotes like this on VIN. If you’re ignorant of the issues at hand, why not keep the ignorance to yourself instead of parading it about this forum? If you’re going to contribute the discussion here, at least contribute non-fictional commentary. Also, read more carefully, you’ve rehashing things that were said and commented on earlier.

          • the truth must really hurt you.
            the 2 comments were in the papers in Israel and in one of the dati papers .. the english one that comes out every thurs.
            why are you denying the truth?
            funny how all liberals and ‘radicals’ always wave away the truth like it’s just a little annoyance to be gotten rid of… making fun of emes and regarding it as ‘ridiculous’ was a great weapon of our first
            enemy (and enemy of HaShem)… amalek.. do you know the name? you sure are using their ploy.


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