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The attorney general's office today (Sept. 22) filed a fraud suit against Stanley Chais of Beverly Hills, who called himself a money manager. For decades, he convinced investors that he was a wizard who could beat the market by investing in derivatives, stocks, currencies and futures, and dabbling in arbitrage according to the AG. Actually, he simply passed his clients' money to Ponzi schemer Bernie Madoff, says the state. The Chais funds reported annual gains of between 20% and 25% with only three months of negative returns between 1996 and 2007. Chais allegedly told Madoff that he didn't want any losses on trades, and Madoff accommodated his desire. Chais's investors didn't know about Madoff, according to the AG. Chais charged his investors an astronomical 25 percent yearly fee and in doing so raked in $270 million. The Securities and Exchange Commission earlier made charges against Chais.

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Comments

SurfPuppy619 Sept. 22, 2009 @ 1:01 p.m.

Unless this guy was in on the scam, which he was not, it is going to be hard to win.

The first witness I would call for the defense would be the head of the SEC who had the Madoff scandal handed to them on a silver platter and still didn't know which was up was. I would then state if the SEC didn't know it was a scam, then it is reasonable that the defendant would not know too.

It is the not my fault defense, the "SODDI" defense (some other dude did it).

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Don Bauder Sept. 22, 2009 @ 7:18 p.m.

Response to post #1: Yeah, but the guy falsely told his investors that the money was multiplying at 20 to 25 percent a year because of his expertise in futures, arbitrage, etc. Lie: strike one. Some of his investors may have known about Madoff, but the others didn't. Strike two. According to the state, at least, he instructed Madoff to never write up a losing trade, and Madoff followed his wishes. Whiff on that alone. Best, Don Bauder

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