6.22.2009 The SEC charged California-based investment adviser Stanley Chais, among others, with securities fraud for allegedly misrepresenting his role in managing certain funds’ assets and for distributing account statements that he should have known were false relating to the Bernard L. Madoff Ponzi scheme. Chais oversaw three funds allegedly involved in the scheme. The SEC alleges that Chais represented to the Funds’ investors that he formulated and executed the Funds’ trading strategies. In reality, the SEC says, Chais merely turned over the Funds’ assets to Madoff without telling the Funds’ investors. The SEC alleges that Chais ignored red flags related to Madoff’s fraud. When the alleged Ponzi scheme collapsed, Chais investors’ accounts were valued at nearly $1 billion. In addition, the SEC alleges that Chais opened and exercised control over approximately 60 other accounts at Madoff’s firm on behalf of Chais’ family members and related entities. Taking all of these accounts collectively, between 1995 and 2008, Chais and his family members and related entities allegedly withdrew more than $500 million more than they actually invested with Madoff.
Click http://www.sec.gov/litigation/litreleases/2009/lr21096.htm to access the SEC litigation release.