The SEC today charged broker-dealer Cohmad Securities Corp. and four individuals with securities fraud, alleging they collectively raised billions of dollars from investors for Bernard L. Madoff’s Ponzi scheme.
In a complaint filed in U.S. District Court in New York, the SEC cited Cohmad; its chairman, Maurice J. Cohn; its chief operating office, Marcia B. Cohn; and registered representative Robert M. Jaffe for actively marketing investment opportunities with Madoff while knowing or “recklessly disregarding” facts that indicated Mr. Madoff was operating a fraud, according to a news release.
Clifford Thau and Steven Paradise, lawyers with Vinson & Elkins, representing Cohmad and the Cohns, couldn’t immediately be reached for comment.
In an e-mailed statement, Mr. Jaffe’s attorneys, Stanley S. Arkin, Howard J. Kaplan and Peter B. Pope of law firm Arkin Kaplan Rice, said: “The complaint filed today by the Securities and Exchange Commission, which we learned about only from the press, smacks of impulsiveness and efforts at self-justification. It is unfair, baseless in the law, and is inaccurate in its understanding of the facts and of Mr. Jaffe.”
In a separate complaint, the SEC charged Stanley Chais, a California-based investment adviser who oversaw three funds that invested all assets — which combined came to slightly less than $1 billion — with Mr. Madoff’s company. The complaint alleges Mr. Chais misrepresented his role in managing his funds’ assets, and distributed account statements he should have known were false.
Mr. Chais’ lawyer, Eugene R. Licker, with Loeb & Loeb, couldn’t immediately be reached for comment.
