Cohmad Securities scandal
The $50 billion scheme of Cohmad Securities founded by Bernard Madoff caused a trail of angry investors and a crowd of betrayed friends and supporters. The Cohmad Securities scandal is a tough case, especially since Cohn and Jaffe both deny any knowledge about the Cohmad Securities scandal, and even claim of having lost money themselves from the scheme. Sonny Cohn even stated that he paid rent to Madoff for the lease of the place.
Robert Jaffe and Bernard Madoff
The Cohmad Securities scandal had only begun to unravel when investors tried to withdraw $7 million from the firm but failed to do so. As a result, Madoff had to take in new investors to let in more money for payment to the previous set of investors.
Jaffe ins’t able to give out personal statements because he claims he isn’t in the right condition and is currently under the “doctor’s care” and Sonny and Marcia Cohn only have their lawyer to make the statements for them.
The prosecutors are saying that the Cohmad Securities scandal was operated using the Ponzi scheme. The Ponzi scheme is associated with the notorious Charles Ponzi and is done by paying off a group of investors money coming from another set of investors, instead of the profit that the company makes.
On December of last year, Bernard L.Madoff who was 70 was charged with securities fraud and is on a $10 million bail with a pending trial. On February 9, a judgment was made. Madoff is not to work in the financial industry again, and his assets will remain frozen.