RT @footnoted "Seriously flouting established SEC rules makes a mockery of the system!"
— Sam E. Antar (@SamAntar) August 30, 2013
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Even as the Doors Were Being Busted Down, Tom Petters Was Sure Everything Would Be Fine
The trial of Cocker Spaniel/Ponzi boy Tom Petters is moving along as more and more witnesses are giving testimony that pretty much solidifies Petters’ statement that his business was “one big fucking fraud”.
Testimony on Tuesday (there were no proceedings yesterday due to the holiday) included that of James Wehmhoff, an accountant for Petters Company Inc. (“PCI”).
Wehmhoff said that Petters and Robert White — Petters’ CFO — were taking money out of a subsidiary for personal use. In addition, he also testified that Petters was panicking about an audit and was desperate to stonewall them:
In an email Petters sent to Wehmhoff and other insiders, Petters allegedly wrote, “We need to send the auditors something every day no matter what and keep them from coming to Minnesota. We must pacify them.”
Yet when the Feds were raiding his businesses last September Petters thought everything was hunky-dory, allegedly telling one investor, ‘everything would be fine’. This despite Petters’ fear of getting clipped and, you know, having to explain just where the hell $3.5 billion went.
We’ll keep you updated until they find this guy guilty.
Accountant Testifies Petters Panicked Over Audit [KSTP]
Accountant: Petters execs misused investor cash [Minneapolis Star-Tribune]
Earlier: Ernst & Young and McGladrey & Pullen Both Have a Petters Problem
SEC Reminds Us of Past Mistakes; Arrests Madoff Associate
One day after it was reported that fraud detecting superman Harry Markopolos called the Commissioners “idiots” and Mary Schapiro “coldly polite” (that’s a compliment, isn’t it?) the SEC is charging another Madoff associate.
Today the Commission brought charges of “conspiracy, securities fraud, falsifying books and records of a broker-dealer, false filings with the U.S. Securities and Exchange Commission and filing false federal tax returns,” against Daniel Bonventre, according to several reports.
Bonventre was the master of making the internal accounting look legit, as opposed to lying to peoples’ faces directly. He was responsible for accounting entries that “[hid] the scope of the investment advisory operations and understating Madoff liabilities by billions of dollars.”
The Commission also brought civil charges against Bonventre, “alleging he helped disguise Madoff’s fraud and financial losses at Madoff’s firm by misusing and improperly recording investor money to create the false appearance of legitimate income.”
While the rest of the media focuses on the who, the what and the how long will that person be spending in FPMITA prison, “Dirty Diapers” Markopolos probably just wanted remind everyone that A) the SEC missed this by ignoring him several times and B) he still doesn’t think too highly of them. Oh, and he has a book coming out.
DOJ, SEC Announce Charges Against Madoff Exec Bonventre [Dow Jones via WSJ]
Madoff Aide Bonventre Becomes Sixth Charged in Fraud [Bloomberg BusinessWeek]
Madoff Whistleblower Slams Obama’s SEC: ‘They’re A Bunch Of Idiots There’ [HuffPo]