One of Madoff’s feeder funds was Fairfield Greenwich who say they did enormous due diligence. The State of Massachusetts says otherwise in their lawsuit against them citing, among other things, a 2005 phone call between Madoff and Fairfield execs about how to manage regulators.
Madoff: “Obviously, first of all, this conversation never took place, Mark, OK?”
Amit Vijaygergiya (Fairfield’s Chief Risk Officer): “Yes, of course.”
Later in the call, according to the court filing, Madoff counsels Vijaygergiya on how to have a discussion with the SEC, “the less you know about how we execute … the better you are … your position is, ‘listen, Madoff has been in business for 45 years … a well known broker. We make the assumption that he’s doing everything properly.'”
Read the whole article. It’s quite damning. IMO, Fairfield is cooked goose, and deservedly so.
But one question remains. How did the State of Massachusetts get transcripts of the phone call? Either the phone was tapped by law enforcement or someone in one of the companies recorded it. They are quoting directly from the call, so it does not appear to be from someone’s recollection of the call either. Interesting.