No problems mate! You who were bamboozled, are the Privileged. Our government will appropriate monies to cover your lose, and guarantee your expected rate of return.

Could you guys do a little homework? I think that the investment arm is EXEMPT from SEC oversight on the basis that is only offered to high net worth individuals. I am not an SEC expert, but I know there are lots of exemptions -- the fact that the SEC made his brokerage arm register tells you that it's jurisdiction is not exactly universal.

Also, note that the complaint was lodged by a competitor, and that "they must be cheating because . . ." isn't much of a basis in fact for actually proving fraud.

The whole point of all these high net worth exemptions for things like hedge funds is that they are purportedly being sold to people savvy enough to ask the right questions and so don't need to be pestered by all these SEC rules, which just get in the way of good returns.

I guess the more things change, the more they stay the same. An ineffectictive S.E.C., dupes willing to be fleeced and a Congress that is just about as worthless as tits on a bull.
Madoff wasn't the only s*%t to hit the fan last week. Strange that the MSM didn't seem to want to mention a larger scam last wekk in which a civil class action lawsuite was filed in Federal court against good old Robert Rubin and oths associated with Citibank to the tune of 122 billion dollars. Yes, things are looking up for entitled elitists these days.

The arrest of financier Bernard Madoff Thursday for operating a "Ponzi scheme" costing investors $50 billion made the TV network news. Curiously, a lawsuit the same day against Clinton Treasury Secretary Robert Rubin for defrauding Citibank shareholders of more than $122 billion, also described as a "Ponzi scheme," got no airplay whatsoever.

Rubin, a Director of Citibank, profited from the shady practices that destroyed the financial system and sent the world's economies into a tailspin. Then, to repair the damage, he and his banker friends put the taxpayer on the hook for trillions.

Could Rubin not have received the same publicity as Madoff because of his close connection to Barack Obama?

Robert Rubin's son Jamie was Obama's main Wall Street fundraiser and is now one of his principal advisers. More significant, Obama's economic team consists of Rubin's proteges including Timothy Geithner, Treasury Secretary, Lawrence Summers, Senior Economic Adviser and Peter Orszag, Budget Director. The Times of London has already dubbed them the "Robert Rubin Memorial All Stars."

Clearly, the media don't want people to realize that the candidate of "Change" chose the people responsible for this calamity to be his "economic team." While in the Clinton White House, Rubin, with Summers, helped tear down the regulatory walls between banks, brokerages and insurance companies and freed them to trade in unregulated and little-understood derivatives worth trillions of dollars.

THE LAW SUIT

In an article entitled "Ponzi Scheme at CITI," the New York Post reported: "A new Citigroup scandal is engulfing Robert Rubin and his former disciple Chuck Prince for their roles in an alleged Ponzi-style scheme that's now choking world banking.

Director Rubin and ousted CEO Prince - and their lieutenants over the past five years - are named in a federal lawsuit for an alleged complex cover-up of toxic securities that spread across the globe, wiping out trillions of dollars in their destructive paths.

Investor-plaintiffs in the suit accuse Citi management of overseeing the repackaging of unmarketable collateralized debt obligations (CDOs) that no one wanted - and then reselling them to Citi and hiding the poisonous exposure off the books in shell entities.

The lawsuit said that when the bottom fell out of the shaky assets in the past year, Citi's stock collapsed, wiping out more than $122 billion of shareholder value.

However, Rubin and other top insiders were able to keep Citi shares afloat until they could cash out more than $150 million for themselves in "suspicious" stock sales" calculated to maximize the personal benefits from undisclosed inside information," the lawsuit said.

The latest troubles for Rubin, Prince and others emerged in a 500-page investigation by Citigroup investors represented by law firm Kirby McInerney.

The probe was used to amend and add new details to a blanket investor lawsuit filed against Citigroup a year ago. The amended suit called the actions of Citi leaders "a quasi-Ponzi scheme" to hide troubles - and keep Citi stock afloat while insiders unloaded about 3 million shares between Jan. 1, 2004 and Feb. 22, 2008 for huge profits.

In addition to Citigroup, Rubin and Prince, the complaint names Vice Chairman Lewis Kaden, ex-CFO Sallie Krawcheck and her successor CFO Gary Crittenden.

Rubin cleared $30.6 million on his stock sales, while Prince got $26.5 million, former COO Robert Druskin got nearly $32 million and former Global Wealth Management unit chief Todd Thomson got $25.7 million, the suit said."

Re: "note that the complaint was lodged by a competitor, and that 'they must be cheating because . . .' isn't much of a basis in fact for actually proving fraud." You don't need to prove fraud for the SEC to investigate potential fraud. The expectation that a reasonable person should have known there was fraud in this instance is apparently strong enough even without further investigation that the Trustee is already considering forcing those who got out of the Madoff firm as long as 2 years ago or more to share in the losses by returning a portion of their withdrawals.

There is an exemption from investment adviser registration for firms that provide advice to less than 15 clients and do not hold themselves out to the public.

What's amazing is that Madoff's advisory firm was registered with the SEC at all. The SEC enacted regulations requiring the registration of hedge fund advisers (though not the hedge funds themselves) in (I believe) 2005; however, the regulation was subsequently thrown out by the US Court of Appeals in DC.

The question to ask, then, is why did Madoff's advisory firm remain registered - inviting (though apparently not receiving) SEC attention - after registration was no longer required? Did he need to add clients 15 through 19 to obtain funds to pay clients 1 through 14? But if so, why not simply establish another advisory firm? Or was he, perhaps, asking to be found out?

Impeach Chris Cox. The SEC has done what it has done--and failed to do what it was supposed to do-- under him because he is a "free market" ideologue of the most radical and repugnant sort. Since he is appointed by the President, I think (please correct me if I'm wrong) that he can only be removed from office by an impeachment and conviction process in Congress. Obviously this won't solve all the problems, but it would be a good step to hold this complete a**hole accountable. Let's start naming names, people!