Huge development in the Madoff case today!

The SEC today filed civil fraud charges against Cohmad Securities and Cohmad principals, Maurice "Sonny" Cohn, 78, and his daughter, Marcia Beth Cohn, 49. Cohmad agent and Palm Beach society swell, Robert Jaffe, 65, was also charged.

The actual complaint is worth a read because it spells out how Cohmad marketed the Madoff investments and how information about the investments was deliberately concealed from the SEC (a point that was laid on with a heavy hand and somewhat self-serving on the SEC's part).

Maurice "Sonny" Cohn and his brother, Milton "Bud" Cohn (who was not charged) from a front page article in the North Shore-LIJ 2008 winter newsletter about the generosity of the Cohns. Also featured on the front page is an article about the generosity of mobster Thomas "Tommy" Gambino.

This photo from a Vanity Fair article was taken at one of Bernie's company outings at Montauk. Marcia Beth Cohn is in the middle. To the left is Peter Madoff and to the right is Cohn's girlfriend, Elaine Solomon, who was Peter Madoff's secretary.

Robert Jaffe, son-in-law of Carl Shapiro, a wealthy Madoff investor from Boston.  Jaffe recruited many Madoff customers in Palm Beach who, according to the SEC, invested $1 billion with Bernie. Shapiro is also under investigation in the Madoff case.

In early January, I wrote about the likelihood of Cohn's involvement in the fraud and in another post, I speculated about the nature of Cohn Delaire & Madoff, Inc. registered in NY in 1986. The company dissolved itself in June 1992, only months before the SEC charged Avellino & Bienes with selling more than $430 million in unregistered securities. Was CD&M an early feeder fund that the SEC let slip by?

According to the SEC, Cohmad ownership by percentage is as follows:

Maurice Cohn - 48%
Marcia Beth Cohn - 25%
Bernie Madoff - 15%
Peter Madoff  - 9%
Milton Cohn - 1%
Rosalie Buccellato - 1%

(Note: Buccellato was not named by the SEC but she is listed in a FINRA report on Cohmad.) 

Alvin Delaire, a longtime Cohmad agent, was not charged in the case and there is some speculation that he assisted the Madoff investigators with their inquiries.

One of the best articles about Cohmad is Nina Mehta's "It's a Cohmad, Mad, Mad World" posted at her blog, MehtaFiscal.    

There is also a lot of speculation as to what exactly SEC Inspector General H. David Kotz discussed with Bernie for three hours last week since the case against Cohmad was already in the can. Keep in mind Kotz himself made the trip from DC to the Metropolitian Correction Center.

The SEC also charged Stanley Chais for being a financial idiot who still managed to make $250 million in fees by convincing his equally unsophisticated customers to sink $900 million into his various investment vehicles. Chais apparently told Bernie never to show a loss on an equity trade so Bernie didn't. Ever. 

The Chais complaint can be read here.  

More to come.