Bernie Madoff, the financial geniu, er, Ponzi schemer, has agreed that he won’t contest any civil cases against him. The criminal proceedings are unaffected, and resume on February 11, when Madoff must appear in court so that prosecutors can explain to a judge why they arrested him.
Bernie Madoff may have had little in common with retail financial advisors anywhere, but his case sure has made life more difficult for advisors. In our February cover story, Senior Editor John Churchill describes how many retail clients (burned by the popping of the credit bubble) are now being viewed somewhat suspiciously by clients. For more, see our cover story, “The Madoff Effect.”
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File this under “Financial Planning 101.” What to do when a big client’s big bonus and severance package may be the future legal target of disgruntled employees and shareholders? Why, protect what you can, of course. Today’s New York Post reports that Stan O’Neal, the former leader of Merrill Lynch (in case you can’t remember), and Robert Nardelli, the CEO of Chrysler LLC, have transferred the deeds of their houses to their wives. In today’s article (hilariously titled, “Dirty Deeding”) O’Neal, who escaped Merrill with a $161-million package, handed over to his wife a $4.5 billion house in suburban New York and a $20 million Madison Ave. duplex, the paper says. But Nardelli, who was run out of HomeDepot (with an estimated $200-million plus package), denies having sold to his wife: A spokesman says errors in the property records were inaccurate, and his wife was always listed on the deed as the owner. Lehman-killer Dick Fuld transferred his $13 million Florida mansion to his wife for $100 last month, the Post says.
We’re sure they don’t fear the populist drum beat that has been calling for them to disgorge some of their dollars for presiding over a staggering destruction of wealth; we’re sure it’s just prudent financial planning.