Massachusetts moves against alleged Madoff feeder fund

The Massachusetts Securities Division held a hearing today to decide whether to permanently revoke the license of a brokerage firm associated with swindler Bernard Madoff.

The hearing officer heard testimony from representatives of Cohmad Securities Corp. as well as Massachusetts Secretary of State William Galvin, who is seeking a default judgment to prevent the firm from doing business in the state.

In a complaint filed last month, Mr. Galvin alleged that Cohmad defrauded investors by acting as a feeder fund for Mr. Madoff’s investment firm, Bernard L. Madoff Investment Securities LLC of New York.

Mr. Galvin began investigating the firm on behalf of many state residents who said they were introduced to Mr. Madoff by representatives of Cohmad Securities, which was partly owned by Mr. Madoff.

The secretary is also seeking to require Cohmad to provide an accounting of all Massachusetts investors that the firm or its agents referred to Mr. Madoff’s firm and any fees earned in connection with the referrals.

The hearings officer took the matter under advisement and set an April 7 deadline for the submission of any other motions from the two parties, said Brian McNiff, a spokesman for Mr. Galvin’s office.

The deadline for a response to those motions is the end of April.

A woman who answered the phone at Cohmad’s New York office declined to identify herself and would not comment on the case.