December 2008

MADOFF MATTERS How To Investigate Targets Of Liability Leading To Claims For Recovery By: Chris McConnell, AIFA Fiduciary Expert Witness / Litigation Consultant Accredited Investment Fiduciary Analyst 12121 Wilshire Blvd. Suite 501, Los Angeles, CA 90025 (310) 943 - 6509 Direct (866) 818 - 2487 Fax Email Chris McConnell Website: www.fiduciaryexpert.com

As events unfold in the Madoff matter, www.fiduciaryexpert.com has issued a summary related to liability and potential recovery. Of note, feeder funds, introducing parties, board members or trustees of non profits and other eleemosynary organizations, advisers thereto and any insurance coverage(s); personal and or commercial, are targets for recovery. Importantly, it's often beneficial to consult with me before you file any recovery papers.

FiduciaryFORENSICS®
Fiduciary Duty > Performance > Liability > Damages > RECOVERY

Attorneys and CPAs need to accurately understand issues and parse information; pertaining to fiduciary duty; NOT just for the Madoff scandal but for every client who is a trustee, fiduciary or beneficiary; occasionally even you, the attorney or CPA, are in those roles!

FiduciaryFORENSICS® measures, all potential parties within the FiduciaryTheater™ duty, performance, liability and damages and recovery.

• Functional fiduciaries, in addition to named fiduciaries, warrant investigation and may have significant liability exposure.
• Connecting the concept of "fiduciary duty" to specific required, represented acts, omissions and or shortfalls portends liability and damages and recovery.

As events unfold, RECOVERY begins to emerge - potential sources include:

Bankruptcy Court-ordered Claw backs from investors; Madoff-controlled entities' employees, agents; Feeder funds, introducing Business managers, Attorneys and CPAs; Excess SIPC, and Board members (at certain Non - profits, foundations, endowments, hospitals, colleges and universities) may be personally liable and lastly any and all insurance coverage(s) maintained by same; whether personal or commercial.

Red Flags, Due Diligence, Fraud & Recovery issues including:

1. SIPC and Excess SIPC coverage, if any?
2. Self reported & custodied securities - proxy voting?
3. Self executed and reported trades - best execution?
4. Investment adviser, hedge fund and or discretionary brokerage account?
5. Performance attribution, Quarterly Monitoring
6. Account agreements, Customer Statements
7. Regulatory filings triangulation - SEC and SRO (FINRA / NASD, NYSE) duties
8. Feeder funds - personnel, policies, procedures, ADV's, incentives, AIMR GPS standards
9. * Exposure for referring Attorneys, Business Managers, CPAs? *
• Kindly see www.fiduciaryexpert.com/page12.html
10. Recovery for charities? Are board members personally liable?
11. Offshore accounts - beyond the reach of US court jurisdiction?

"Quick facts" about Chris McConnell, AIFA®

• BA, Economics / Accounting option, Rutgers University, 1983
• MBA, Pepperdine University, 1990
• AIFA®, Center for Fiduciary Studies, 2003
• Passed the CPA exam in NY, 1986
• 25 Years securities industry + expert experience
• 100% Independent, Objective and Conflict-free fiduciary expert

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Chris McConnell & Associates is the 100% independent, objective, conflict-free fiduciary expert. Since 2003 helping Attorneys and CPAs understand the specifics of Breach of Fiduciary Duty by trustees and or 3rd parties. He does not sell investments or insurance and does not provide legal, tax or investment advice; seek a qualified professional for assistance in those areas.

See Chris McConnell's Profile on Experts.com.

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Updated January 3, 2009

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