investment diversification. the financial advisor should have told him to split his investment portfolio with 5 different firms.
Jan. 3 (Bloomberg) -- Just six days before he was charged with running a $50 billion Ponzi scheme, Bernard Madoff allegedly agreed to invest $10 million for a family that had turned an ice delivery business into one of the largest independent heating oil distributors in New York City. Rosenman Family LLC, managed by Martin Rosenman, president of Bronx-based Stuyvesant Fuel Service Corp., sued Irving Picard, the trustee appointed to supervise the unwinding of Madoffâs business. He is seeking a ruling that Picard has no claim to the $10 million. Rosenman, who hadnât previously invested with Bernard L. Madoff Investment Securities LLC, said he spoke by phone with Madoff Dec. 3 about investing the money, according to a complaint filed Jan. 1 in bankruptcy court in Manhattan. âMadoff stated that the fund was closed until Jan. 1, 2009, but that Mr. Rosenman could wire moneyâ before that date into a Madoff account, âwhere it would be held until the fund opened after the new year,â according to the complaint. Rosenmanâs lawyers said Madoff was recommended as âsafe and reliable.â .... The day after Rosenman allegedly received the trade confirmation, Madoff revealed the fraud to his sons, saying no more than $300 million was left in his accounts, according to the FBI. The next day, Madoff, 70, was arrested and charged by federal prosecutors with one count of securities fraud. He faces as much as 10 years in prison and a $5 million fine if convicted. $10 Million âLike many of the victims, word spread through the community that investments with the Madoff firm were safe and reliable,â Howard Kleinhendler, another lawyer for Rosenman, told Bloomberg Television. âMadoff was planning on distributing between $200 million and $300 million to his friends, family and loyalâ employees, Kleinhelder said. âThis was part of the collection process to increase the amount to distribute.â ... http://www.bloomberg.com/apps/news?pid=20601087&sid=aiFGIXNoIRa4&refer=home