Tremont Group - the hedge fund that had a loss of 3.3 billion dollars.
Bank Santander - Spanish bank that had a loss of 2.87 billion dollars.
Bank Medici - Austrian bank that had a loss of 2.1 billion dollars.
The largest auditing firms and rating agencies - PRICEWATERCOOPERS, KPMG, and ERNST & YOUNG - recommended investments in Madoff Funds. Several investors felt comfortable with the investment in his funds, with thumbs up from even the largest auditing firms, beside several banks were using Madoff Funds (BERNARD L. MADOFF INVESTMENT SECURITIES) as reference of investment without risk.
Another reason that also ratified the false motivation to allow and induce the billionaire fraud is that all the markets players are registered at the SEC – SECURITIES AND EXCHANGE COMMISSION, an official organ of the US government that oversee and regulate public companies and all the operations in the stock exchange in U.S., EURONEXT, London Stocks, and others included in international agreements and contracts.
The SEC – SECURITIES AND EXCHANGE COMMISSION lent the market the false idea that accomplished its legal responsibilities from extremely strict technical criteria. However it was a regrettable fact that nobody important oversight the American Institution.
The auditing companies were sought by major media in the U.S. and did not want to comment on this event and the recommendation of investment in Madoff Funds as they used to do in order to maintain and attract customers. They also used to present the Madoff Fund as a conservative investment – because “the security gains were uniform”!
The SEC, in turn, although it had been warned several times of a "possible" financial improbity in this fund, always disregarded the complaints in administrative procedures. These are the same and so serious such as, for example, the serious complaints made to SEC about billionaire frauds in U.S. Exchange and Securities Market since 2005 referred to companies and banks in Brazil, like Eletrobras that, alone, evidences fraud more than 20 billion dollars.
The defendants of the Madoff Case brought together various documents in order to prove the truth of this fraud, just like the operation that occurs with the Brazilian companies.
Only after a decade of various complaints and the criminal losses of more than 50 billion dollars, the SEC began its investigation of the fund.
Detail to be emphasized is that the Madoff Scheme was discovered due to the international economic crisis that caused a loss of 70 trillion dolares.
If there is no crisis – which started in the real estate market because of mortgages that reaches a small portion of American homes - today Mr. Madoff, the investment fund managed by him and the SEC would be completely silent and also helping forward the maintenance of this fraud.
The SEC just began the investigation after the whole world knew that investors had losses of billion dollars. The SEC, at the end, must be consider as co-author of the Madoff conspiracy, because it chose not to check the veracity of the complaints, indirectly, helping the global financial crisis that slaughter to all, regardless of whether or not they are investors of the stock market.
Because of this world crisis, the former President and the current U.S. President notified the world that they are awake to the crisis. They will put into practice, with the Federal Reserve Bank, many relief and economic assistance plans that may involve monetary intervention of more than 3 trillion dollars. The same occurred - in due proportion - in England - through its Prime Minister, Germany, France, China, Australia, European Union and other important countries of the world.
In Brazil, the President of the Federative Republic of Brazil, Mr. Luis Inacio Lula da Silva, on several occasions commented on the crisis that shook the international financial system. Some excerpts follow – ipsis literis:
Lula: “Brazil will insist on regulation of the system so the people is no longer the victim of reckless speculation," he commented about the global financial crisis.
Lula: "The governments (of the rich countries) are putting money to save the banks and you need to save money for the poor", speech at the inauguration ceremony of a highway in Bolivia, with the presence of the president Evo Morales.
The president also stated:
Lula: “is not visible, which he defined as "unprecedented in human history", but had no doubt to attribute it to the lack of effective regulation on the economic and financial operators."
"The crisis did not arise from excess of production, arose not from excess of demand from the population. This crisis arose from the excess of speculation by greedy people who are no longer satisfied to earn much money within the system's own rules, so they invented new rules."
After read the Brazilian Presidential statements on this case, it is worthy of interest to read the comparison below:
The Madoff Case just happened because of successive complaints, made during a decade, which were never properly investigated. The Madoff case did not happen because of the U.S. real estate crisis. The Madoff case - unlike - was discovered because of this crisis, which exposed the criminal person that appeared due to the stolen investors needs to draw their applications.
In spite of this conclusion, in Brazil and in U.S., at CVM and SEC the omission repeats ...
The Eletrobras for more than a decade has been the main denounced in dozens of process in the USA, BASEL COURT, COSRA, WTO among others national, foreign and international entities.
The Eletrobras as explained in the referred denunciations has been causing harm to the financial system, omitting from its balance sheet a liability of approximately 20 billion dollars. "By not recording these liabilities on the balance sheet, the company increases its profits and therefore the dividends to be paid to shareholders," as demonstrated in the auditors report mentioned at the end of this article.
The law firm ÉDISON FREITAS DE SIQUEIRA is reporting publicly and to the divisions in charge of regulating the market since 2005 – for 4 years. The firm is already made several complains at the CVM and SEC, as long Eletrobras is registered in the US stock market and can trade their stocks and ADRs, a fact that made several pension funds and American investors shareholders with more than 20% of the capital of this business group and others directly linked to it.
Although, the auditing companies mentioned above, that had suggested investors to invest in the Madoff Fund also audited Eletrobras in its annual financial statements, balance sheet, shareholders’ general meeting and assets statement.
Comparing the two cases, Madoff and Eletrobras, it is incomprehensible that the CVM - BRAZIL - and the SEC - U.S. - again will wait more 6 years to start the investigation of a fraud involving billion of dollars that manipulate more than 350 billion dollars in net resources and 2 trillion dollars in assets at the international market.
It is the time of government registers their countries and international market experiences not only to make speeches and hasty solutions, but also to make changes in procedures of auditing. This action is much more economical, healthy, moral and ethical than billion dollar aid to cure the damage partly, most irremediable.