Massachusetts revokes license of firm tied to Madoff

Massachusetts Secretary of the Commonwealth William F. Galvin filed a complaint today to revoke the securities registration of Cohmad Securities Corp. because it refused to participate fully in the state’s investigations of Bernard Madoff and his firm’s alleged $50 billion Ponzi scheme. Cohmad is described as “deeply intertwined” with Madoff Investment Securities in the complaint filed by Mr. Galvin’s office. The complaint states that Bernard L. Madoff Investment Securities LLC of New York made monthly payments to Cohmad of more than $67 million; those funds appear to have come from clients who invested with Mr. Madoff because of referrals from Cohmad. Mr. Madoff reportedly is a director of Cohmad and owner of 10% to 25% of its equity. According to the complaint, Cohmad was sent subpoenas requiring it to produce documents and testify to its relationship with Mr. Madoff and his clients. The firm provided only limited documentation, and after what the complaint describes as “multitudinous and often conflicting excuses” that “delved deeply into the realm of the absurd,” Cohmad stockbroker Robert Jaffe invoked his Fifth Amendment right during his testimony. Maurice Cohn, Cohmad’s chairman and chief executive, and chief compliance officer Marcia Cohn, were equally unresponsive during interrogations. “A firm that after engaging in the securities business in Massachusetts for many years categorically refuses to discuss its actions with regulators has no right to continue to engage in the securities business in the Commonwealth of Massachusetts,” the complaint states. Mr. Galvin’s office wants Cohmad to turn over a list of Massachusetts investors referred to Mr. Madoff, and a detailed account of the accompanying fees. Cohmad is based in New York, and it is located in the same office building as Madoff Investment Securities, published reports said.