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September 10th, 2009
12:11 PM ET

Financial Dispatch: Madoff coached colleagues on evading SEC investigators

Financier Bernard Madoff is serving a 150-year prison term for defrauding thousands of investors.

Financier Bernard Madoff is serving a 150-year prison term for defrauding thousands of investors.

Gene Bloch
Managing Editor
CNN New York

How is President Obama’s health care address going over with Americans? Ali Velshi is aboard the CNN Express and will be live at noon in Scranton PA, where the Tea Party Express has a rally scheduled.

Meanwhile, the Census Bureau updated us today on the number of people without health insurance coverage – it stood 46.3 million in 2008, up 600-thousand from the 2007 level – but down from the 47 million reported in 2006. In the same report, the Census announced real median household income fell 3.6 percent to $50,303, and the poverty rate rose by 7-tenths of a percentage point to 13.2.

The jobs picture is still dire, but the latest weekly figures are “moving in the right direction” as economists like to say. The number of people filing first time jobless claims fell by 26-thousand last week to 550-thousand. The number of people continuing to collect unemployment is still above 6-million, but that number fell slightly as well.

Is the stimulus helping create jobs? This afternoon the Obama administration is releasing its first report to Congress about the stimulus, which is formally called the Recovery Act.

The banking bailout also is in the headlines today. Harvard professor Elizabeth Warren, head of the Congressional Oversight Panel, says she wants straight talk from Treasury Secretary Timothy Geithner – who is set to testify before her panel at 1p on Capitol Hill. Where has the money gone? What’s the government’s exit strategy? The panel’s latest report also asks for confidential memorandum from The Treasury Department and the Federal Reserve concerning investments in Bank of America and Citigroup. What is Professor Warren looking for?

When a phone conversation begins “Obviously, first of all, this conversation never took place, OKAY?” – you know that something’s not quite right. In audiotapes released yesterday by the Massachusetts Secretary of State’s office, Ponzi-schemer Bernard Madoff coached colleagues on how to evade questions from Securities and Exchange Commission investigators. "You know, you don't have to be too brilliant with these guys, because you don't have to be.”

At one point, Madoff interrupted the conversation to take another phone call. He returned and said, "I'm sorry. If I get any more solicitations for charity, I'm going to kill myself." The tapes offer a revealing look at the contempt Madoff had for the SEC, which missed years of red flags pointing to his massive fraud. There is also a Senate Banking Committee hearing today at 230p on how the SEC missed the Madoff scandal.

And gas prices are up but only a little. AAA reports a gallon of regular unleaded is averaging $2.576 ($2.58 for graphics purposes), up 3-tenths of a cent and breaking an 8-day streak of declines.

On CNNMoney today:

* The fight over doctor lawsuits. Obama on Wednesday night said he would accept health care reform provisions that reined in medical malpractice lawsuits. Story will look at the issue and the fight.

* Home repossessions: 'In the soup for at least a year.' The number of bank repossessions drops sharply in August, but it may be the calm before the storm.

* 10 a.m.: Census Bureau releases income, poverty and health insurance estimates for 2008

* Fortune's Most Powerful Women in Business – w/galleries, Q&A and video. Most powerful women in United States; most powerful globally. Plus the DC Power List.


Filed under: Economy • Finance • Gene Bloch • Unemployment • Wall St.
soundoff (5 Responses)
  1. Annie Kate

    The Bernie Madoff scheme shows us just how well and how often people really look into who they are using to invest their money and how its being invested. We all need to educate ourselves on these funds before we invest our hard earned dollars in them.

    September 10, 2009 at 5:18 pm |
  2. Joe G. (Illinois)

    Bernie Madoff may have robbed Peter to pay Paul like Obama.. But you must admit “Bernie Madoff only used 50 billion in his entire 20/30 year span of service to make shallow America happy and joyous for all the world to envy. Yet with Obama in such short amount of time, even if you only count the 750 billion “Stimulus” has yet to be able to claim a smile.

    September 10, 2009 at 2:22 pm |
  3. Ikaika

    Millions depending on government to "fix" problems. These problems did not just fall out of the sky, this was all carefully planned by those way up there at the top, those who pretend not to exist. The blame is being placed on us, and that is a shame beyond belief. Huge corporations continuing to steal our money and ruin the planet, drugs continue to flood our country (DEA WHO???), our Consitution continues to be trampled on. Class warfare, race warfare, gender warfare, liberal vs. conservative, communism vs. capitalism, Muslim vs. the rest of the world – these warfares continue to rage on. Who do you think created all of this? How many think it's just the natural order of things? As long as we are all down here fighting among ourselves, and while our lives and souls are strained by our current dismal economic climate, we will never be able to see the real problems, not to mention, trying to do something about it all.
    When will something give? Well, when we, as a people, decide to focus on what is realistically right in front of us. Not s simple project, but well, nothing worth anything is ever easy. Where do we start, you ask? Open your eyes and ears, and look around you, proof is everywhere. Leaving it there for now.

    September 10, 2009 at 2:14 pm |
  4. Mike Armstrong TX.

    Madoff was a bad coach thats why his team lost he should have thrown in the towel at the third ending.

    September 10, 2009 at 1:31 pm |
  5. Michael C. McHugh

    There are many more crooks like him running around on Wall Street–even worse–although I doubt if they are going to go after them. They are too rich and powerful, and the Dems seem afraid to challenge them.

    September 10, 2009 at 12:18 pm |