SEC charges Jaffe, other Madoff 'feeders' - Boston Business Journal:

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Among the defendants named in the suit isRobert Jaffe, the Boston-basede social maven who funneled more than $1 billion in referralxs to Madoff. The SEC alleges that Jaffe was compensateds for his services with outsized returnsx in his personal accountswith Madoff. According to the government’s complaint, each party stands accuse d of “knowingly or recklessly disregardingb facts indicating that Madoff was operating a In additionto Jaffe, the suit’s other named defendant s include California money manager Stanley Marcia Cohn and Maurice The Cohn’s served in senior roles with , an investmeny firm that is also a namedx defendant in the SEC’s suit.
Regulators say the Cohnx and Chais received hundreds of milliond of dollars in fees for managingh client money that was ultimately lost in theMadof scheme. “Madoff cultivated an air of exclusivithy by pretending that he was too successful to trouble himselv with marketing tonew investors,” said Robert director of the SEC’s divisiob of enforcement, in a prepared writtemn statement. “In fact, he needed a constanf in-flow of funds to sustain his fraud, and used his secret controlp of Cohmad toobtain them.
” For example, the SEC said the Cohna and Cohmad received fees for moneyt invested with Madoff, but were not paid if clients laterf withdrew more than what a client had initiallyy invested — even if, as Madoff often purported, the account had grownh considerably under his stewardship. So in the case of a cliengt whoinvested $10,000 and later on withdrew Cohmad recognized the accountr as having a value of negative $5,000. That accountingf entry would hold true even ifthe account, unded Madoff’s reporting, was said to be wortn $100,000 on paper.
In the case of Chais, who held himseltf out as an “investing wizard,” the SEC said in actualitu he wasan “unsophisticated investor who did nothinvg more than turn all of (his assets over to Madoff, while charginy the funds more than $250 million in among other accusations. Meanwhile, Chais and his famil y withdrew morethan $500 millionb more than they had actually invested with Madoff.