A spokesman for the Financial Industry Regulatory Authority (FINRA) stated today that FINRA’s review of Bernard Madoff’s records show no record of Bernard Madoff’s investment funds placing trades through his brokerage operation. The Boston Globe reports that “that leaves only two options – either he was placing trades only through other firms, which would be highly unusual, or he was not placing any trades.”
FINRA spokesman Herb Perone stated that “[t]here was no evidence of the Madoff broker-dealer executing trades for the [Madoff] investment adviser.”
The Boston Globe explains that ordinarily, a firm that owns both an investment advisory business and a broker-dealer would place a large portion of trades through its own broker-dealer to earn fees on its own trades, if possible. To farm out every trade would be almost unheard of, suggesting that if Madoff did not process any of his investment funds’ trades through his own brokerage, he likely was not making the trades he claimed.
