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The FBI Should Be Asking How The Trustee is Spending Investor's Money! (Not at what FGG did!)

If there are two people in the world that know anything about securities industry compliance issues, its my friends Mark McKeefry and Amit Vijayvergiya at Fairfield Greenwich.

There's Mark to the right; a brilliant kid!

Their credentials are impeccable, and rightfully, they've been well paid to understand the strategies that I was executing. Why their integrity would be challenged by government investigators that have no training or background in securities compliance is as ridiculous as handing over $28 million of my investor's money to a bunch of vendors that the "trustee" has assigned to destroying my firm. Who is the trustee?? And what are his relationships to the vendors pocketing $28 million??

Jim Cramer said it exactly right on Dec 17 when he laughed at the idea of my running a so-called "Ponzi scheme" and instead, he pointed to the US Social Security system. That's a Ponzi Scheme!...I'm a simple guy and all I did was accommodate investors and provide a sensible return.

Speaking of returns..my proposal that TARP allocate a mere $7 billion to Madoff Securities is already being embraced by dozens of leading economists. I know because they're visiting with me at my co-op every day now.

Why?? Because, I'm smarter than most people. Its that simple. Just like I invented payment-for-order-flow, and just like I said that electronic trading was the future, if the knuckleheads in Washington can add 2+2, they'll follow my plan, and everyone will be satisfied.

I have the records of every nickel that came into my firm. And every dollar that went out. But, the fairest way to resolve this dispute, and the best strategy to ensure that everyone is kept honest is the following:

1. Forget about "trustees" that insist on getting paid $28 million--and God knows how much they'll want in another month. Instead, we need to appoint a special committee that's already familiar with the record handling. Frankie D. should be the Chairman, Ira can be the auditor. He's done this before. The Judge can appoint two people, and my sons Mark and Andy will also be on the committee. I think there should also be someone designated by the US Internal Revenue Service.

2. Everyone that supposedly invested with our firm will need to submit a copy of the check they mailed, or a copy of the wire transfer confirmation into our firm.

2a. Along with the proof of deposit, those investors will need to provide copies of tax returns from each year they were supposedly earning profits from us. My guess is that will weed out the dozens of groups that are making ridiculous claims about having lost hundreds of millions of dollars. At least half of what people are saying they "lost" was accumulated paper profits. Yes, they paid taxes on that money, and their tax returns will be used to support that.

3. Any non-US investor or fund that doesn't want to provide tax reporting information won't be eligible to participate in the TARP support. Fuck them..(Yes, you know who you are.)

4. Based on our records, the US investors in our firm should have paid more than $2 billion in income taxes over the past three years alone. Instead of the Government being obliged to refund that money, TARP should make a $7 billion infusion and that will be re-invested in 10 year US Treasuries. We'll write call options on the Treasuries in order to capture additional revenue.

4a. Based on a 2% yield, we'll generate $1.4bil in tax free interest, and another $200 mil or so from call premiums.

5. The cash flow alone will support a stable and orderly refunding of the principal invested.

Ask any economist, or Barney Frank, or even John Paulson why this doesn't make sense. I guarantee they'll agree with me!

Then I can take off this stupid bathrobe and go back to Palm Beach!

Full post as published by Bernard Madoff on December 30, 2008 (boomark / email).