SEC Files Civil Fraud Cases Against Madoff Feeder Funds

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The SEC is attempting to recover additional monies to repay the investors, who lost $65 billion with Bernie Madoff, by filing civil fraud lawsuits against the feeder funds that provided Madoff with their investors cash.

Civil fraud suits were filed today against California investment advisor Stanley Chais who invested all of the $1 billion under his control with Madoff. The SEC has the audacity to allege that Chais should have known that Madoff was defrauding clients based on the returns advertised by Madoff.

This is precisely the same argument that can be made against the SEC who were fully informed of the fraud two years before Madoff's investment fund collapsed and yet did absolutely nothing to protect investors.

Additionally, the SEC filed civil fraud cases against Maurice Cohn, Marcia Cohn and Robert Jaffe who operated Cohmad Securities Corporation, another feeder fund that invested virtually all of its clients monies with Madoff.

This is a pathetic attempt by the SEC to recover monies from these individuals, and the total amount of any recovery will be a minor factor in the vast scope of the Madoff fraud.

What the SEC is in fact doing is setting forth the causes of action that can be levied against itself by investors for its intentional and negligent actions in the oversight of Madoffs activities.

If Chais is guilty of ignoring the impossible claims Madoff made then the SEC is doubly guilty of the same act since they had conclusive evidence of Madoff's fraud at least two years prior to Madoff's collapse, certainly more information and evidence was at their disposal than Chais ever had.

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