The Commission announced that, on October 11, 2013, the Honorable Laura Taylor Swain, United States District Court for the Southern District of New York, entered a default judgment against Peter Madoff, former chief compliance officer and senior managing director at Bernard L. Madoff Investment Securities LLC (BMIS) from 1969 to 2008.
The Commission’s complaint alleged that Peter Madoff created stacks of compliance documents setting out supposedly robust policies and procedures over BMIS’s investment advisory operations. However, no policies and procedures were ever implemented, and none of the reviews were actually performed even though Peter Madoff represented that he personally completed the reviews.
The SEC’s complaint also alleged that in addition to creating false compliance materials, Peter Madoff created false broker-dealer and investment advisor registration applications filed by BMIS. He also failed to implement and review required policies and procedures, and falsified the firm’s books and records. Peter Madoff was richly rewarded for his misconduct, pocketing tens of millions of dollars through salary and bonuses, fake trades, sham loans, and direct, undocumented transfers of investor funds to himself from the bank account that BMIS used to perpetrate the Ponzi scheme.
Peter Madoff failed to answer, move or otherwise respond to the Commission’s complaint. The default judgment permanently enjoins Peter Madoff from violating or aiding and abetting violations of Sections 10(b), 15(b)(1), 15(c) and 17(a) of the Securities Exchange Act of 1934 and Rules 10b-3, 10b-5, 15b3-1 and 17a-3 thereunder, and Sections 204, 206(1), 206(2), 206(4) and 207 of the Advisers Act of 1940 and Rules 204-2 and 206(4)-7 thereunder. The default judgment orders no monetary relief in light of Peter Madoff’s criminal conviction and the $143 billion in restitution ordered in the parallel criminal proceeding United States v. Peter Madoff, 10 Crim. 228 (S.D.N.Y.) (LTS).
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