Cohmad Securities
Encyclopedia
Cohmad Securities, whose name combines “Cohn” and “Madoff,” founded in 1985 by Bernard Madoff
and Maurice Cohn, Madoff’s friend and former neighbor. It is in the Business Services, N.E.C. industry in NEW YORK, NY. and has approximately 10 to 20 employees and annual sales of $1,000,000 to $4,999,999.
Cohmad received $67 million in generated fees from Madoff investments, from 2000-2008.
The brokerage firm lists its address as Madoff's firm's address in New York City. Cohmad employs Robert Jaffe
, as vice-president. Jaffe is married to Ellen Shapiro, daughter of Boston philanthropist Carl J. Shapiro
, the founder and former chairman of apparel company Kay Windsor Inc. and an early investor and close friend of Madoff. Jaffe reportedly convinced the elder Shapiro to invest $250 million with Madoff just 10 days before Madoff's arrest.
Cohmad had fewer than 650 client accounts, and made 99.7% of its sales from brokerage services to Madoff's larger broker-dealer. In its audited financial statements for the 12 months ending June 30, 2008, Cohmad said revenue from Madoff Securities totaled $3,736,829. Its total sales for the same period were $3,748,397.
circuit", and attracted many Palm Beach Country Club members as investors." Jaffe brought in 150 accounts and more than $1 billion to Madoff. Madoff paid Jaffe directly through accounts he kept with Madoff at much higher returns than earned by other investors. Between 1996 and 2008, Jaffe withdrew at least $150 million, and the SEC claims he was aware Madoff was engaged in fictitious trading. Jaffe has said he received a commission of 1% to 2% from an investor's first profit, and he paid commissions to financial advisers who steered cash to Madoff's fund.
Richard Spring, of Boca Raton, Florida
, received payments from Cohmad for many years in exchange for bringing investors and investment ideas to Madoff.
Alvin J. "Sonny" Delaire Jr., whose late father, Alvin J. Delaire was a partner with Sonny Cohn in a previous venture, also recruited clients for Madoff's advisory business.
of the Commonwealth of Massachusetts
, who is in charge of the state's securities issues, filed suit against Jaffe, a Cohmad broker for Madoff, who promoted Madoff's funds to wealthy investors in Massachusetts and Florida
. On February 4, compelled to testify, Jaffe invoked his Fifth Amendment
right. Marcia Cohn, Maurice Cohn and Alvin Delaire, Jr. failed to appear. On February 11, 2009, Galvin filed a complaint seeking to revoke the Massachusetts license of Cohmad Securities Corp., an accounting of all Massachusetts investors Cohmad referred to Madoff’s company, all the fees it earned doing so (more than $67 million), and a fine. It named Ruth Madoff as having withdrawn $10 million on December 10, 2008 and $5.5 million on November 25, 2008 from her brokerage account. It also cited $526,000 in referral fees paid from Madoff Investments, to Cohmad, to Vienna Bank Medici
majority owner, Sonja Kohn
, which she subsequently denied. On May 28, 2009, Bank Medici lost its Austrian banking license. Kohn and the Bank are under investigation.
On May 8, 2009, the Commonwealth of Massachusetts found the firm to be in “default” for not assisting regulators. Cohmad’s securities registration has been revoked, and they must provide an accounting of all fees the company or its agents earned for referring Massachusetts investors to Mr. Madoff's firm as well as, pay a $100,000 fine for failing to cooperate with the state securities investigation.
On March 15, 2009, Federal prosecutors filed a notice in federal court declaring its intent to seek the forfeiture of the Madoffs' interests in Cohmad Securities.
On June 22, 2009, Madoff Trustee, Irving Picard
filed a claim against Cohmad, founder Maurice “Sonny” Cohn, daughter Marcia Cohn, Robert Jaffe, Richard Spring, Alvin J. Delaire, Jr., Stanley Mervin Berman, Jonathan Greenberg, Cyril Jalon, Morton Kurzrok, and Rosalie Buccellato, among more than two dozen individuals and trusts in U.S. Bankruptcy Court in New York. The lawsuit claims that up to 90 percent of Cohmad’s income came from referring clients and that the firm had a “symbiotic” relationship with Madoff, having earned hundreds of millions of dollars from the fraud. The lawsuit seeks more than $100 million paid to Cohmad six years prior to Madoff’s firm declaring bankruptcy, and more than $105 million in profits Cohmad employees and their families withdrew from the investment accounts they held with Madoff.
On June 22, 2009, the U.S. Securities and Exchange Commission (SEC) also filed civil fraud charges
against co-founder Maurice "Sonny" Cohn, president Marcia Cohn, and Robert Jaffe. The lawsuit alleges the company was Madoff's "in-house marketing arm" and critical to Madoff's scam. Cohmad representatives were paid for funds they brought into the firm but not for any putative increase in the investments' value. Withdrawals were treated as a loss, which "suggested that profits generated by Madoff were fictitious", although Madoff changed the arrangement in 2002 for Maurice Cohn, and began paying him $2 million a year.
Jaffe has filed requests with the Courts to dismiss the SEC and the Picard cases. The cases are Picard v. Cohmad Securities Corp., 09-AP- 1305, U.S. Bankruptcy Court, Southern District of New York (Manhattan), and SEC v. Cohmad, 09-cv-5680, U.S. District Court, Southern District of New York.).
Bernard Madoff
Bernard Lawrence "Bernie" Madoff is a former American businessman, stockbroker, investment advisor, and financier. He is the former non-executive chairman of the NASDAQ stock market, and the admitted operator of a Ponzi scheme that is considered to be the largest financial fraud in U.S...
and Maurice Cohn, Madoff’s friend and former neighbor. It is in the Business Services, N.E.C. industry in NEW YORK, NY. and has approximately 10 to 20 employees and annual sales of $1,000,000 to $4,999,999.
Business relations
Maurice "Sonny" Cohn owned 48% of Cohmad, and his daughter Marcia, who served as president and chief compliance officer owned 25%. Madoff owned 15%. Mr. Madoff's brother, Peter owned 9%, and Mr. Cohn's brother owned 1%, and another unnamed Cohmad employee owned 1%.Cohmad received $67 million in generated fees from Madoff investments, from 2000-2008.
The brokerage firm lists its address as Madoff's firm's address in New York City. Cohmad employs Robert Jaffe
Robert Jaffe (stockbroker)
Robert M. Jaffe , an American stockbroker, and long-time associate of Bernard Madoff, promoted Madoff's fund to wealthy investors in Massachusetts and Florida. Jaffe has homes in Weston, Massachusetts and in Palm Beach, Florida, Cohmad Securities Corporation employs Robert Jaffe, as...
, as vice-president. Jaffe is married to Ellen Shapiro, daughter of Boston philanthropist Carl J. Shapiro
Carl J. Shapiro
Carl J. Shapiro is a Boston philanthropist and entrepreneur. He and his wife, Ruth live in Boston and Palm Beach. In 1939, he founded Kay Windsor, Inc., in New Bedford, Massachusetts, and built it into one of the largest women's apparel companies in the country...
, the founder and former chairman of apparel company Kay Windsor Inc. and an early investor and close friend of Madoff. Jaffe reportedly convinced the elder Shapiro to invest $250 million with Madoff just 10 days before Madoff's arrest.
Cohmad had fewer than 650 client accounts, and made 99.7% of its sales from brokerage services to Madoff's larger broker-dealer. In its audited financial statements for the 12 months ending June 30, 2008, Cohmad said revenue from Madoff Securities totaled $3,736,829. Its total sales for the same period were $3,748,397.
Bernard Madoff agents
Jaffe, a philanthropist, "worked the Palm Beach, FloridaPalm Beach, Florida
The Town of Palm Beach is an incorporated town in Palm Beach County, Florida, United States. The Intracoastal Waterway separates it from the neighboring cities of West Palm Beach and Lake Worth...
circuit", and attracted many Palm Beach Country Club members as investors." Jaffe brought in 150 accounts and more than $1 billion to Madoff. Madoff paid Jaffe directly through accounts he kept with Madoff at much higher returns than earned by other investors. Between 1996 and 2008, Jaffe withdrew at least $150 million, and the SEC claims he was aware Madoff was engaged in fictitious trading. Jaffe has said he received a commission of 1% to 2% from an investor's first profit, and he paid commissions to financial advisers who steered cash to Madoff's fund.
Richard Spring, of Boca Raton, Florida
Boca Raton, Florida
Boca Raton is a city in Palm Beach County, Florida, USA, incorporated in May 1925. In the 2000 census, the city had a total population of 74,764; the 2006 population recorded by the U.S. Census Bureau was 86,396. However, the majority of the people under the postal address of Boca Raton, about...
, received payments from Cohmad for many years in exchange for bringing investors and investment ideas to Madoff.
Alvin J. "Sonny" Delaire Jr., whose late father, Alvin J. Delaire was a partner with Sonny Cohn in a previous venture, also recruited clients for Madoff's advisory business.
Civil lawsuits, investigations and revocation
On January 14, 2009, William Galvin, Secretary of StateSecretary of State
Secretary of State or State Secretary is a commonly used title for a senior or mid-level post in governments around the world. The role varies between countries, and in some cases there are multiple Secretaries of State in the Government....
of the Commonwealth of Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
, who is in charge of the state's securities issues, filed suit against Jaffe, a Cohmad broker for Madoff, who promoted Madoff's funds to wealthy investors in Massachusetts and Florida
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
. On February 4, compelled to testify, Jaffe invoked his Fifth Amendment
Fifth Amendment to the United States Constitution
The Fifth Amendment to the United States Constitution, which is part of the Bill of Rights, protects against abuse of government authority in a legal procedure. Its guarantees stem from English common law which traces back to the Magna Carta in 1215...
right. Marcia Cohn, Maurice Cohn and Alvin Delaire, Jr. failed to appear. On February 11, 2009, Galvin filed a complaint seeking to revoke the Massachusetts license of Cohmad Securities Corp., an accounting of all Massachusetts investors Cohmad referred to Madoff’s company, all the fees it earned doing so (more than $67 million), and a fine. It named Ruth Madoff as having withdrawn $10 million on December 10, 2008 and $5.5 million on November 25, 2008 from her brokerage account. It also cited $526,000 in referral fees paid from Madoff Investments, to Cohmad, to Vienna Bank Medici
Bank Medici
Bank Medici AG was a bank based in Vienna, Austria. It was founded in 1994 by banker Sonja Kohn and incorporated as a bank in 2003.Bank Medici's president and majority stakeholder is Sonja Kohn. Its main institutional shareholder is Bank Austria Creditanstalt, Austria's largest banking group...
majority owner, Sonja Kohn
Sonja Kohn
Sonja Kohn is an Austrian banker.-Biography:Sonja Kohn was born to Jewish refugees from Eastern Europe. She grew up in Vienna in a small Jewish community....
, which she subsequently denied. On May 28, 2009, Bank Medici lost its Austrian banking license. Kohn and the Bank are under investigation.
On May 8, 2009, the Commonwealth of Massachusetts found the firm to be in “default” for not assisting regulators. Cohmad’s securities registration has been revoked, and they must provide an accounting of all fees the company or its agents earned for referring Massachusetts investors to Mr. Madoff's firm as well as, pay a $100,000 fine for failing to cooperate with the state securities investigation.
On March 15, 2009, Federal prosecutors filed a notice in federal court declaring its intent to seek the forfeiture of the Madoffs' interests in Cohmad Securities.
On June 22, 2009, Madoff Trustee, Irving Picard
Irving Picard
Irving H. Picard is a partner in the law firm Baker Hostetler. He graduated from the Wharton School, University of Pennsylvania, with a B.S. degree , from Boston University School of Law with a J.D. degree , and from the New York University School of Law with an LL.M. degree in 1967, and was...
filed a claim against Cohmad, founder Maurice “Sonny” Cohn, daughter Marcia Cohn, Robert Jaffe, Richard Spring, Alvin J. Delaire, Jr., Stanley Mervin Berman, Jonathan Greenberg, Cyril Jalon, Morton Kurzrok, and Rosalie Buccellato, among more than two dozen individuals and trusts in U.S. Bankruptcy Court in New York. The lawsuit claims that up to 90 percent of Cohmad’s income came from referring clients and that the firm had a “symbiotic” relationship with Madoff, having earned hundreds of millions of dollars from the fraud. The lawsuit seeks more than $100 million paid to Cohmad six years prior to Madoff’s firm declaring bankruptcy, and more than $105 million in profits Cohmad employees and their families withdrew from the investment accounts they held with Madoff.
On June 22, 2009, the U.S. Securities and Exchange Commission (SEC) also filed civil fraud charges
against co-founder Maurice "Sonny" Cohn, president Marcia Cohn, and Robert Jaffe. The lawsuit alleges the company was Madoff's "in-house marketing arm" and critical to Madoff's scam. Cohmad representatives were paid for funds they brought into the firm but not for any putative increase in the investments' value. Withdrawals were treated as a loss, which "suggested that profits generated by Madoff were fictitious", although Madoff changed the arrangement in 2002 for Maurice Cohn, and began paying him $2 million a year.
Jaffe has filed requests with the Courts to dismiss the SEC and the Picard cases. The cases are Picard v. Cohmad Securities Corp., 09-AP- 1305, U.S. Bankruptcy Court, Southern District of New York (Manhattan), and SEC v. Cohmad, 09-cv-5680, U.S. District Court, Southern District of New York.).
External links
- Commonwealth of Massachusett Secretary of State Complaint, January 14, 2009
- Picard v. Cohmad Securities Corp. 09-AP-1305, June 22, 2009
- SEC v. Cohmad Securities Corp., 09 Civ. 5680, June 22, 2009