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Ruth Madoff, the 67-year-old wife of alleged fraud mastermind Bernard Madoff, is being investigated by US regulators over whether she helped maintain secret records used in a US$50 billion Ponzi scheme, a person familiar with the matter said.
The Securities and Exchange Commission, combing through files at her husband's New York firm, found evidence she might have helped track payments, the person said, declining to be identified because the inquiry isn't public. Two people with knowledge of the probe said on December 14 that the agency is also examining why her name appears on related transactions.
"She's not charged with anything," said Ira Sorkin, a New York attorney at Dickstein Shapiro, which represents the couple. "The SEC has not sought to freeze her assets. She's under no bail conditions."
Authorities haven't accused Ruth Madoff of wrongdoing. US Magistrate Judge Gabriel Gorenstein, who is overseeing criminal proceedings against her husband, yesterday ordered the couple to surrender their passports. Bernard Madoff's wife and brother, Peter, were the only people willing to sign a US$10 million bond to secure his release. Ruth Madoff is seeking to hire her own lawyer, a person familiar with the matter said.
Bernard Madoff, 70, was arrested on Saturday and charged with a single count of securities fraud. In court documents, prosecutors and the SEC said he had said his investment advisory business was "all just one big lie".
The couple appeared in court yesterday to sign documents to give up homes in Montauk, New York, and Palm Beach, Florida, if Bernard Madoff flees. His bail hearing was postponed a second time in as many days and he is under house arrest, involving electronic monitoring and a 7pm curfew.
Ruth Madoff, who also has a master's of science degree in nutrition from New York University, co-edited a cookbook in 1996 called The Great Chefs of America Cook Kosher.
The book contains recipes for kosher dishes by well-known chefs, such as Daniel Boulud and Wolfgang Puck.
The legal developments came after SEC chairman Christopher Cox said yesterday that the agency failed to act on "credible, specific" allegations about Bernard Madoff dating back to 1999. The Madoff affair will be at the centre of planned congressional hearings on the reform of the SEC, said a senior Senate official, speaking on condition of anonymity.
Cox, a Republican appointed by President George W. Bush, has said he would step down when Bush leaves office on January 20. President-elect Barack Obama plans to name Mary Schapiro, chief executive officer of the Financial Services Regulatory Authority, as Cox's successor, people familiar with the matter said yesterday.
- BLOOMBERG
