By Beth Healy, Globe Staff
Robert Jaffe, a former broker who introduced scores of investors to Bernard Madoff, today sought to have fraud charges against him dismissed, saying federal regulators failed to back up their accusations with facts.
"While salaciously branding Jaffe a henchman of Bernie Madoff, the complaint here is a textbook example of failure to state a claim," said the dismissal motion filed by Jaffe in US District Court in New York.
The US Securities and Exchange Commission had charged Jaffe, 65, and the Madoff-controlled brokerage he worked for, Cohmad Securities Corp., with fraud for "knowingly or recklessly" participating in the convicted swindler's multi-billion-dollar Ponzi scheme. Between 1996 and 2008, the SEC said in its complaint, Jaffe earned $150 million for his Madoff referrals. The Newton native earned the money not as commissions, the SEC alleged, but in the form of large returns on his own investment accounts -- once as much as 46 percent a year. The trustee in charge of recovering funds for Madoff victims also made similar charges against Jaffe.
Jaffe said the government's allegations against him did not amount to fraud. "The Complaint does not name a single investor who believes Jaffe misled him, where they spoke, why they spoke, when they spoke, or what was said or done,'' Jaffe's response says.
The SEC had no immediate comment.
Jaffe's lawyers, Stanley S. Arkin and Peter B. Pope, in a statement, said, "The complaints which we seek to dismiss have apparent and telling deficiencies. Both the SEC and the trustee have tried to tar Bob Jaffe. But as our motions show, they just do not have the facts to back up their name calling. Bob Jaffe is not the guy they say is. He is a good guy caught in a bad storm."
Jaffe is married to a daughter of Carl Shapiro, the Boston philanthropist who was one of Madoff's largest and longest-standing clients. The Shapiro family has acknowledged losing at least $545 million to Madoff, in personal funds and from their family foundation. It is not known how much of the money was principal, as opposed to false profits invented by Madoff.