Mass. revokes Cohmad license
N.Y. brokerage tied to Madoff Ponzi scheme
Cohmad Securities Corp., a New York brokerage closely linked to convicted Ponzi artist Bernard Madoff, has had its Massachusetts license revoked and was ordered to pay a $100,000 fine, Secretary of State William F. Galvin said.
A state hearing officer ruled in favor of the Massachusetts Securities Division in its case against Cohmad, which for many years had an office in Boston's Back Bay. The firm was partly owned by Madoff, and, state regulators had argued, was indistinguishable from Madoff's operation.
Cohmad's lawyer, Steven Paradise, said, the firm is considering its legal options, including appealing to Superior Court.
The ruling found that Cohmad was in default for filing its response to the complaint late. Paradise called the default ruling unfair. The firm must provide a report of all Massachusetts investors that Cohmad or its registered representatives referred to Madoff. It must also provide an accounting of all fees earned in connection with those referrals.
In the past, Cohmad has said it did not connect any Massachusetts investors with Madoff, but it reversed that position yesterday, saying it did have "some" Bay State clients who invested with Madoff. Paradise said the firm has already given that information to Galvin. But it appears that the state also wants Cohmad to detail the customer list of Robert Jaffe, a broker for the firm and a member of a prominent Boston philanthropic family.
Paradise said the firm does not have Jaffe's client list, and that any introductions Jaffe made to Madoff he did on his own. Jaffe's spokesman has not disputed that.
Jaffe maintains that he was as stunned by the December revelation of the Madoff scandal as other victims. He and his extended family, which includes hospital and university donors Carl and Ruth Shapiro, say they lost hundreds of millions of dollars in the scheme.
Also yesterday, the trustee liquidating Bernard Madoff's defunct money-management firm created a hardship program to speed reviews of claims of the hardest-hit victims of the world's biggest Ponzi scheme.
The program provides expedited payments of up to $500,000 each to investors who can't pay medical bills, buy food, or care for dependants, trustee Irving Picard said on the case website. It will also cover people 65 years and older who were forced to come out of retirement after losing money to Madoff.
Material from Globe wire services is included in this report. Beth Healy can be reached at bhealy@globe.com. 
