Madoff investigators say no trades made
Investors wiped out by the Bernard Madoff scandal got more bad news Friday: Investigators have confirmed suspicions that the monthly statements showing the disgraced financier was making stock trades for them were pure fiction.
“We have no evidence to indicate securities were purchased for customer accounts” in the past 13 years, said court-appointed trustee Irving Picard at a packed, town-hall style meeting at U.S. Bankruptcy Court in lower Manhattan. “This is a case where we’re going to be looking at cash in and cash out” – the shorthand definition of a Ponzi scheme.
The trustee so far has recovered an estimated $950 million in assets – including works of art at Madoff’s midtown office – that would be used to help cover claims likely to reach into the billions. He also hopes to raise money by selling a legitimate trading arm of the business, which still has 40 employees.
St. John’s, Antigua
Regulators take over Stanford banks
Regulators in the Caribbean took over Antiguan banks owned by Texas financier R. Allen Stanford on Friday, hoping to contain damage to the local economy as U.S. investigators explore an alleged fraud scheme involving billions of dollars.
The Bank of Antigua suffered a run on deposits, even though it has not been named in the fraud complaint by the U.S. Securities and Exchange Commission. A failure of the local bank could have severe consequences in the twin-island nation of Antigua and Barbuda, the Eastern Caribbean Central Bank said in explaining its intervention.
The SEC complaint focuses on the billionaire’s offshore investment bank, Stanford International Bank Ltd., where an estimated $8 billion is now being controlled by a team of accountants working for Vantis Business Recovery Services. Antigua’s banking regulatory commission said it appointed the British firm as receiver to protect “the reputation and integrity” of its banking sector.
Washington
Energy costs push consumer prices rise
Consumer prices rose modestly in January, propelled by higher energy costs, but economists said they remain more concerned about the threat of price declines throughout the economy.
That’s because even with last month’s increase in consumer prices, inflation has been flat over the past year, the lowest reading in more than a half-century.
The Labor Department said Friday that consumer prices rose by 0.3 percent last month, which was the first increase since prices were up 0.7 percent in July. Prices were flat in August and September, and then posted huge declines in the fourth quarter of last year.
The November plunge of 1.7 percent was the largest on government records going back 61 years. Prices fell by 0.8 percent in both December and October, the government said Friday.