Irving H. Picard, the court-appointed trustee in charge of liquidating the investment firm of Bernard L. Madoff today filed a suit against New York-based broker dealer, Cohmad Securities Corp. to recover what he alleged were decades worth of "ill gotten gains" received as a result of the firm's "symbiotic relationship" with Bernard L. Madoff Investment Securities LLC.

Cohmad, formed by Mr. Madoff's friend and former neighbor, Maurice "Sonny" Cohn, had "little other business or purpose," than to steer customers to Mr. Madoff's investment firm, Mr. Picard alleged in Picard v. Cohmad Securities Corp., 09-AP 1305, filed in Southern District U.S. Bankrupty Court. Mr. Picard claims that as much as 90 percent of Cohmad's reported income came from referrals to Mr. Madoff.

Cohmad, Mr. Cohn, his daughter, Marcia, who acted as the company's chief operating officer, and other Cohmad principals comprised part of Mr. Madoff's "inner circle" and had "unique access " to his investment advisory "business," Mr Picard's complaint states. He claims that the defendants profited from Madoff's Ponzi scheme "to the tune of several hundred million dollars through conduct that they knew or should have known was inconsistent with legitimate or credible securities or broker-dealer business activities."

Meanwhile, the Securities and Exchange Commission today filed suits in the Southern District charging Cohmad, Mr. Cohn, Ms. Cohn, and its registered representative Robert M. Jaffee, the company's vice president, with helping to conceal Mr. Madoff's fraud. "As reward for their stunning marketing success, Defendants were paid more than $100 million through Cohmad," SEC v. Cohmad Securities Corp., 09 Civ. 5680, alleges...

New York Law Journal: Picard, SEC Sue Investment Firms