BANKRUPTCY: SMALL “MADOFF” GROW

Who does not know the history of Bernie Madoffthe financier new york that, modernizing the “Ponzi Scheme”, has cheated thousands of people and is caught in the act, with the current us legislation, the maximum penalty equal to 150 years in prison.

Madoff was found guilty of eleven charges (felony charges), including fraud securities fraud by financial advisors, mail fraud, fraud, telematics, three-count indictment for money laundering, false statements, perjury, false deposits “Securities and Exchange Commission” and fraud in the pension to employees (https://www.justice.gov/usao-sdny/programs/victim-witness-services/united-states-v-bernard-l-madoff-and-related-cases).

The Ponzi Scheme that has inspired the hoax was invented by an Italian immigrant in the USA, Charles Ponzi, and allows those who start the chain and the first investors to get high returns in the short term, paid with the amounts paid by new unsuspecting investors enticed by the high revenues.

In such a case dealt with by the Supreme court was noted that the financial activities of the customers had been the object of a radical change of ownership between the two companies, investment linked, Alpha and Beta, with the economic resources of the clients of the company, Alfa used for operations of the “refund” to customers of the company Beta and this happened in the absence of any evidence that the customers were given information about the target of operations.

The art. 21, paragraph 1, letter (b) the FSA states that in the investment operations of the qualified entities must inform “clearly customers, before acting on their behalf, of the general nature and/or sources of conflicts of interest,” and then, the inferred existence of the consent of the clients on the use of financial instruments and cash and cash equivalents, is not excluded, according to the Supreme Court, the attribuibilità of the assets of the subject in the compulsory administrative liquidation of the assets from the same managed in any way, they have been obtained, the more that the improper uses of the securities or the money investors have given their confusion in the assets of the intermediary, and the fitness to be the subject of a distraction.

You have to remember that the responsibility for the crime bankruptcy for distraction requires the assessment of the availability, on the part of the accused, of goods that are not found within the company and, therefore, the subtraction of the guarantee to the creditors of the assets to active effect.

In the case of the treaty, given that the securities of the customers of the company's Beta were bonds virtually illiquid of a nominal value of 200 million Euros, the Supreme court noted that the payments made by customers were made only in favour of the company Alpha and not of the company Beta, therefore, from the total amount of around 225 million Euros in total objected to the title of fraudulent bankruptcy, to distraction, had to be deducted the capital “scudati” customer of the Beta, which was approximately 200 million Euros.

So most of the “alleged securities held by the company Beta, being an artificial creation of the accused, were to be considered non-existent on the floor of the actual economic valuecould not therefore be the subject of a distraction, and by doing so eliminate the objective element of the crime.

The Court in fact annulled the judgment with for a referral for a new trial.