Madoff Brother, at Arm's Length?

Wall Street Journal (subscription) ^ | January 10, 2009 | Tom Lauricella and Aaron Lucchetti

[CutePuppy]

As the No. 2 executive at Bernard L. Madoff Investment Securities LLC, Peter Madoff worked side by side with his older brother Bernard for nearly 40 years.

Outside the office they skied together, including on one 2004 trip with a broker working at the firm's office who recruited investors for Bernard Madoff's advisory business. With Peter long viewed as an heir apparent, the brothers tried to avoid flying together.

Now, they are keeping their distance. Bernard Madoff has told prosecutors he acted alone in bilking investors out of $50 billion over several decades. Peter Madoff has stopped coming into the office and isn't talking publicly about his role at the securities firm, where he headed trading operations.

In a firm defined by family ties, Bernard, 70 years old, and Peter, 63, were especially close. With an office a few feet from his brother, Peter helped create innovative electronic-trading systems on which much of Madoff Securities' success and reputation was built. For the past two decades, Peter ran the day-to-day trading operations of what the firm described as its core business.

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In the late 1990s, Bernard's sons, Mark and Andrew, took over direct responsibility for the trading operation but continued to report to Peter, who increasingly began taking on the role of "Mr. Outside," managing client relationships and handling regulatory issues.

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Amid the scandal, Peter is expected to leave National exchange's board in coming weeks, according to people familiar with the matter. The exchange and Madoff Securities' trustee are also expected to discuss how to handle the firm's 11% stake in the exchange.

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Peter's daughter, who also attended Fordham Law, went on to join the family business. She worked primarily as a compliance lawyer at Madoff Securities' market-making arm at the time of her uncle's arrest.

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[GOPJ]

For the past two decades, Peter ran the day-to-day trading operations of what the firm described as its core business.

He was either "in on it" or his IQ's in the low 70's...

[Enchante]

That’s what my tagline is all about!!

Madoff has nothing on the criminals who are responsible for the Ponzi scheme that is our Social Security system.