Governor Rell: Gov. Rell: Banking Department to Work with AG on Madoff-Related Probe

{Seal of the State of Connecticut}


M. Jodi Rell

April 6, 2010
(800) 831-7225

Governor Rell: Banking Department to

Work with AG on Madoff-Related Probe



            Governor M. Jodi Rell today announced that she has directed the Connecticut Department of Banking to refer the results of a preliminary investigation into possible securities violations related to the Bernard L. Madoff case to the state’s Attorney General.


            The investigation into the securities activities of PSCC Services Inc., a Westport-based pension consultant, and its founder and owner Robert L. Silverman, as well as Westport National Bank, a federally chartered bank located in Westport, is an outgrowth of the Madoff fraud scheme that resulted in losses of nearly $65 billion to investors.


            “Bernie Madoff perpetrated a fraud that has created a landslide of misery for thousands upon thousands of innocent people,” Governor Rell said. “They are left picking up the pieces of shattered dreams and lost hopes. If these allegations are true, I am deeply troubled by the failure of the pension consultant and the bank to conduct minimal due diligence and to make important disclosures to investors.”


            Madoff pleaded guilty last year to 11 counts and admitted operating what investigators believe may have been the largest investor fraud ever committed by an individual.


            “Our state Banking Department has been looking into allegations that Westport National Bank created one or more investment funds for clients of PSCC Services and utilized Madoff’s company, Bernard L. Madoff Investment Securities, as the funds’ investment manager,” Department of Banking Commissioner Howard Pitkin said. “The probe found information indicating that Silverman and PSCC Services allegedly steered clients toward pooled investments for which Westport National Bank served as the nominal custodian and which were to be managed exclusively by Madoff’s company.


            “The state probe suggests clients allegedly received statements from the bank showing their investment in one of two funds and characterizing the investment as involving ‘shares’ or ‘units’ with a designated market value,” Governor Rell said. “When Madoff’s scheme collapsed, the investments were purportedly valued at over $59 million.


            “In return for their services, Silverman and PSCC Services allegedly received clients’ fees in excess of $14 million and failed to properly disclose to clients how those fees were calculated,” Governor Rell said. “Westport National Bank allegedly received over $2.5 million in fees for managing the pooled investments.


            The Governor has directed Banking Commissioner Howard F. Pitkin to work with Attorney General Richard Blumenthal to review the findings of the investigation to date and to purse all remedies available under Connecticut law.


            Commissioner Pitkin urged Connecticut consumers who may have been affected by the alleged violations to contact the Banking Department at (800) 831-7225.





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Content Last Modified on 4/6/2010 4:38:27 PM

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