Aurelia Finance

Last updated

Aurelia Finance
Type private bank and fund-management company
Headquarters
Geneva
,
Switzerland
Services feeder fund to Bernie Madoff

Aurelia Finance SA was a private bank and fund-management company in Geneva, Switzerland that was set up as a feeder fund to Bernie Madoff's illegal Ponzi scheme. [1] [2]

Contents

Aurelia managed 1.7 billion Swiss francs of clients’ money, and advised clients to invest in the Hermes World Fund, a Madoff feeder fund which was listed in Dublin in January 2004, as part of a “conservative” portfolio. [1] [3]

Madoff

It placed assets of its 800 million Swiss francs ($758 million) Hermes World Fund in investments with Bernard Madoff. [1] [4]

Irving Picard, the trustee charged with recovering money for Madoff fraud victims, alleged that in September 2008 when a JPMorgan Structured Investments Distribution Marketing division employee disclosed JPMorgan plans to redeem its money, he was threatened by employees of Aurelia Finance. [5] [6] Picard asserted in a complaint: "The Aurelia Finance representatives repeatedly opposed [JP Morgan's] plan. At two points in the conversation, the Aurelia Finance representatives made threats ... referring to 'Colombian friends' who could 'cause havoc' and telling [the JPMorgan employee] 'we know where to find you’.” [5] JPMorgan reported the threats to the UK’s Serious Organised Crime Agency in October 2008 by filing a Suspicious Activity Report, concerned that “Colombian drug money” was involved in the Madoff firm. [5] [7] [8]

Aurelia lost an estimated $800 million of clients' money by investing in Bernard Madoff's $65 billion Ponzi scheme, uncovered in December 2008. [2] [9]

Post-Madoff

In April 2009, all five directors of Aurelia's board were charged by a Geneva magistrate with criminal mismanagement of client assets, and with enriching themselves on management fees, finder fees, and commissions paid for fictitious returns that were never verified. [2] [10] They all then resigned from the board. [2] [11] Cattaneo and Stepczynski retained executive roles at the bank, however. [2] The company had one sole director as of 4 June 2009, Gerhard Auer. [2]

In November 2009, prosecutors leveled money laundering charges at Stepczynski after the bank he tried to use to transfer millions of francs out of Switzerland informed the authorities. [2] A Geneva examining magistrate then froze the assets of all five former Aurelia directors. [2]

On September 4, 2015 the criminal complaints against the five directors were settled in Geneva. [12]

See also

Related Research Articles

JPMorgan Chase American multinational banking and financial services holding company

JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City. JPMorgan Chase is ranked by S&P Global as the largest bank in the United States and the 5th largest bank in the world by total assets, with total assets of US$3.213 trillion. It is also the world's most valuable bank by market capitalization. JPMorgan Chase is incorporated in Delaware.

Bear Stearns American investment bank

The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The company's main business areas before its failure were capital markets, investment banking, wealth management, and global clearing services, and it was heavily involved in the subprime mortgage crisis.

Bernie Madoff American businessman and white collar criminal

Bernard Lawrence Madoff is an American former market maker, investment advisor, financier and convicted fraudster who is currently serving a federal prison sentence for offenses related to a massive Ponzi scheme. He is the former non-executive chairman of the NASDAQ stock market, the confessed operator of the largest Ponzi scheme in world history, and the largest financial fraud in U.S. history. Prosecutors estimated the fraud to be worth $64.8 billion based on the amounts in the accounts of Madoff's 4,800 clients as of November 30, 2008.

Union Bancaire Privée

Union Bancaire Privée is a private bank and wealth management firm headquartered in Geneva. UBP is one of the largest private banks in Switzerland, and serves private and institutional clients. The bank was founded in 1969 by Edgar de Picciotto, and is one of the best-capitalized banks in Switzerland, with CHF 140.3 billion of assets under management.

Sonja Kohn is an Austrian banker.

Fairfield Greenwich Group is an investment firm founded in 1983 in New York City. The firm had among the largest exposures to the Bernard Madoff fraud.

Madoff investment scandal Investment scandal discovered in 2008

The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008. In December of that year, Bernie Madoff, the former NASDAQ chairman and founder of the Wall Street firm Bernard L. Madoff Investment Securities LLC, admitted that the wealth management arm of his business was an elaborate multi-billion-dollar Ponzi scheme.

Participants in the Madoff investment scandal

Participants in the Madoff investment scandal included employees of Bernard Madoff's investment firm with specific knowledge of the Ponzi scheme, a three-person accounting firm that assembled his reports, and a network of feeder funds that invested their clients' money with Madoff while collecting significant fees. Madoff avoided most direct financial scrutiny by accepting investments only through these feeder funds, while obtaining false auditing statements for his firm. The liquidation trustee of Madoff's firm has implicated managers of the feeder funds for ignoring signs of Madoff's deception. Although Madoff claimed to have executed the scheme alone, subsequent investigation has shown that he was assisted by a small group of close associates, as well as the feeders' self-interested indifference to the source of his investment returns.

Recovery of funds from the Madoff investment scandal has been underway since the scandal broke in December 2008. That month, recovery trustee Irving Picard received funds from the Bank of New York account where Bernard Madoff held new investments into his Ponzi scheme. As it has been concluded that no legitimate investments were made on the investors' behalf for at least the last 12 years of operation, recovery has proceeded on a "money in/money out" basis. Investors are entitled to receive no more than the nominal cash amounts that they paid in and did not subsequently withdraw, without regard to inflation, interest, opportunity cost or the false statements that Madoff provided them. Those statements combined to a total balance of approximately $64 billion, while the admitted claims amount to $18 billion. As of January 2021, the trustee had recovered $14.4 billion toward these claims through legal action against Madoff associates, feeder funds and beneficiaries of the scheme, and had made twelve distributions to investors.

Jeffry M. Picower was an American investor involved in the Madoff investment scandal. He was the largest beneficiary of Madoff's Ponzi scheme, and his widow agreed to have his estate settle the claims against it by Madoff trustee Irving Picard for $7.2 billion, the largest single forfeiture in American judicial history.

Stanley Chais

Stanley Chais was an American investment advisor, money manager, and philanthropist. He operated "feeder funds" which collected money for funds related to the Madoff investment scandal. The widow, family, and estate of Chais settled with Madoff trustee Irving Picard in 2016 for $277 million.

The K1 fund was a British Virgin Islands based hedge fund, initially marketed to and invested in by mainly German-based private investors, and latterly a series of global banks. With an estimated size of $378million/£249million and $1Bn under management, it collapsed in 2008. It is estimated by administrators Grant Thornton that liquidated funds able to be returned to investors are zero. It is suspected by German regulators BaFin to be a ponzi scheme.

NBAD Private Bank (Suisse) SA

NBAD Private Bank (Suisse) SA is a Swiss private bank located in the heart of Geneva. It provides private banking services for private clients. It is an independent and wholly owned subsidiary of the National Bank of Abu Dhabi Group.

Thema International Fund PLC, based in Dublin, Ireland, is a Dublin-listed, Undertakings for Collective Investment in Transferable Securities (UCITS) III-certified, open-end fund incorporated in Ireland, which was launched in December 1996. It created only one sub-fund, the Thema Fund. The fund had a minimum investment requirement of $50,000.

Tremont Group Holdings, Inc., a Delaware corporation headquartered in Rye, New York, is a hedge fund that was a feeder fund to Bernard Madoff's investment advisory firm in the Madoff investment scandal. It was the second-largest feeder fund to Madoff's firm, after Fairfield Greenwich, and received fees of 2% of assets for doing so.

Shana Diane Madoff, sometimes referred to as Shana Madoff Skoller Swanson, is an American attorney who is now a yoga teacher.

Hyposwiss Private Bank Ltd was a Swiss private bank, located in Zurich, that closed in 2013.

Defender Limited is an investment fund. It was incorporated in the British Virgin Islands in 2007. Defender funneled clients' funds to Bernard Madoff's firm as part of a Ponzi scheme run by Madoff. Madoff was arrested in December 2008, and pleaded guilty to fraud in 2009. He is serving a 150-year prison term.

Genevalor Benbassat & Cie is an asset manager located in Geneva, Switzerland. The firm set up five European feeder funds that invested almost $2 billion into Bernie Madoff's criminal Ponzi scheme.

References

  1. 1 2 3 Mulier, Thomas (30 December 2008). "Aurelia Finance Invested Client Money in Madoff, Le Temps Says". Bloomberg. Retrieved 21 February 2013.
  2. 1 2 3 4 5 6 7 8 de Sa'Pinto, Martin (12 November 2009). "Aurelia man charged with money laundering-sources". Reuters. Retrieved 21 February 2013.
  3. ↑ de Sa'Pinto, Martin (23 April 2009). "Swiss Madoff investors await Aurelia ruling". Reuters. Retrieved 21 February 2013.
  4. ↑ de Sa'Pinto, Martin (12 March 2009). "UBP to partially reimburse Madoff victims". Reuters. Retrieved 21 February 2013.
  5. 1 2 3 Murphy, Megan (3 February 2011). "JPMorgan under fire over Madoff role". FT. Retrieved 21 February 2013.
  6. ↑ Courtney Comstock (15 April 2011). "JPMorgan Did A Cost-Benefit to See If It Was Worth Keeping a Ponzi Scheme As a Client". Cnbc. Archived from the original on 7 April 2013. Retrieved 21 February 2013.
  7. ↑ Schecter, Anna (2 December 2010). "JP Morgan Suspected Madoff Months Prior to Arrest". ABC News. Retrieved 21 February 2013.
  8. ↑ "Madoff trustee: JP Morgan execs were warned". usatoday.com. 4 February 2011. Retrieved 21 February 2013.
  9. ↑ "Swiss judge allows charges in Madoff losses case". Reuters. 24 April 2009. Retrieved 21 February 2013.
  10. ↑ Bloomberg Markets. July 2009. Retrieved 21 February 2013.
  11. ↑ Giles, Warren (7 May 2009). "Rothschild Difference With Madoff Becomes Geneva's Obsession". Bloomberg. Retrieved 21 February 2013.
  12. ↑ "Geneva wealth managers pay defrauded investors to settle Madoff case". Reuters. 4 September 2015. Retrieved 22 December 2016.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.