Catherine Hooper: “I wuv you Andy, but now it’s time to go back to your wife.”

The noose is growing tighter around the Madoff boys and Uncle Peter, all of whom claim no knowledge of Dad’s evil plan to bilk investors. The authorities are investigating Cohmad Securities, the Madoff feeder fund of all feeder funds.

Regulators probing aspects of Bernard Madoff’s alleged fraud are intensifying pressure on Cohmad Securities after Robert Jaffe, a Cohmad executive and partner of Mr. Madoff, failed to testify before Massachusetts officials.

Cohmad, a small brokerage firm registered in New York, operates out of the same Manhattan office as Mr. Madoff’s stock-trading operation. A spokesman for Mr. Jaffe said he did not know of the alleged fraud.

While Cohmad executed some trades for Mr. Madoff’s funds, its primary purpose appears to have been recruiting customers for Mr. Madoff’s now-fallen advisory business, according to company filings and interviews with current and former Madoff employees. Many such Madoff “feeders” have come under scrutiny in the days since Mr. Madoff’s admission to a $50 billion investor fraud.

Cohmad, a conjunction of the last names of investor Maurice “Sonny” Cohn and Mr. Madoff, carried especially tight ties. Cohmad was filled by employees with long-term or family relationships with the Madoffs, and its operations were enmeshed in the main Madoff businesses, interviews and records show.

Robert Jaffe

Greer Gattuso/Palm Beach Daily News

Robert Jaffe, pictured above in his vintage MG, didn’t know about the alleged Madoff fraud, according to a spokesman.

Cohmad has recently come under scrutiny of the Massachusetts Secretary of the Commonwealth, whose securities division has begun an investigation into Cohmad, saying the investigation is designed to protect Massachusetts investors.

After Cohmad vice president Mr. Jaffe failed to testify Tuesday morning in response to a subpoena, the office said it was “preparing to enforce the subpoena and take all other necessary actions to protect Massachusetts investors.”

A spokesman for the state said Mr. Jaffe was offered a two-day extension as long as Mr. Jaffe agreed to appear Thursday. The spokesman said Mr. Jaffe, who helped bring Palm Beach, Fla., investors to Mr. Madoff, refused to make such a guarantee.

Regulators also are keeping an eye on Cohmad’s trading. Cohmad long cleared its trades through Bear Stearns, now part of J.P. Morgan Chase & Co. J.P. Morgan has been asked by the Securities and Exchange Commission and the U.S. Attorney’s office to monitor Cohmad’s trades and is cooperating, a bank spokesman said.

A spokesman for Mr. Jaffe said Mr. Jaffe is under doctor’s care and had notified the state. The spokesman said the state had agreed to an adjournment, adding that Mr. Jaffe had no knowledge of Mr. Madoff’s alleged fraud and was a victim himself.

Cohmad’s sales representatives appear to have played a key role in the evolution of Mr. Madoff’s hunt for clients starting in the early 1990s, according to investors and documents. The company was formed in February 1985 as a venture involving Mr. Madoff and his longtime friend, Mr. Cohn.

At least since the 1990s, Mr. Cohn would at times act as a gatekeeper to Mr. Madoff partnerships, who promised investors unspectacular but steady returns, say investors. Individual investors who wanted to invest with Mr. Madoff were told to contact Mr. Cohn. Mr. Cohn would then pass the lead on, and potential clients would then either hear back from Mr. Madoff or Frank DiPascali, who worked closely with the advisory business, according to people close to Cohmad.

Mr. Cohn is listed as Cohmad’s largest stakeholder, according to current regulatory filings. Bernard Madoff owns between 10% and 25% of the partnership, these records show, while his brother Peter Madoff also owns a share. Other owners include Mr. Cohn’s daughter, Marcia, who held the title of president and chief compliance officer, and Mr. Jaffe, whose ownership was less than 5%, according to the filings.

Up until a few years ago, Cohmad employees sat in a small group near the main Madoff stock trading desk on the 19th floor of its midtown Manhattan headquarters.

Somehow, a defense that “we never noticed they were there, we never asked them why they were there and they told us they were doing nothing bad, nothing bad at all” is beginning to seem unconvincing. Anyone interested in a couple of houses on Cherry Valley Road and Tomac Avenue?

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One response to “Catherine Hooper: “I wuv you Andy, but now it’s time to go back to your wife.”

  1. Towny

    Follow the tickets.