Steve Syre 12-15

" And that delighted to have Warren in holly in the studio delighted also. To a welcome back for those spot that we do every day at this time we do the Boston business report with the Boston Globe's Steve science. And today's sponsor of the Boston business report is SP ally savings bank life insurance is Tedy Bruschi is choice. -- for insurance good morning Steve sigh yeah."

" good morning I gotta know when the review arguing in the studio there. You start Croatia that he."

" Ha ha -- Well I -- locals -- can go I can be very quickly is the ideal size fourteens the element."

" When the last time a president at a -- shoot raw."

" And that's not that I do remember a crucial -- and on the podium. At the un to issue up banging on the podium sent -- the United States we we will bury you will I don't know what happened behind closed doors with Hillary and bill but to not surely follow through high spring shoes I -- I bring boots to this site. Yeah I worry about -- she's got these spike heels to it's very dangerous in the studio today Steve so. You could be the that you could be the peacekeeper you are in the midst of an absolutely. Even cop rat them all story is that a reading this Saturday I can't get enough that. Lot of local people successful generous people. Just that taken to the cleanest millions and millions of dollars."

" It is an amazing story this is. They're potentially the biggest Ponzi scheme -- halt climate still being unraveled right now it involves. Money manager in the European Bernie made off with a visit. What talk about it name made for a story Bernie made off Fiji where he'd. You don't he claimed to have sort of it made fifty billion dollars that's billion with a -- you know disappeared through his money management business. Over a period our business in a Ponzi scheme where. I think we're going down nobody was paying one customer witness the new customer coming. Money coming in the door it and do this is a guy who's been in business for decades and decades and has a big big influential clients -- in Boston who have lost it is. -- we don't even know yet tens of millions of dollars certainly. Maybe hundreds of millions of dollars that's certainly with in the -- at the realm of possibility. The biggest big losers. Here in Boston. Appear to be the Shapiro apparently we're which have their names on all kinds of stuff the big Philip Philanthropic. -- in Boston. Both and Beth Israel. I I swear it is seven build different buildings and Brandeis that have their name on them. Very big givers to Dana Farber they have a building that's just supposed be starting at. A Boston Medical Center I believe you know the implications of this says it shudders through the city and the institutions that received money. From these families in the -- art alone they're just the most prominent ones are are just amazing."

" Eight vote -- I don't know I don't know I think this is this is such a tough story and I'm wondering you know who's going to be their own issues that this guy. But then is also the Shapiro is that you know one of their son in -- Jaffe was outselling. Was one of the marketers for this Ponzi scheme and and and anybody you know one -- is it actually struck me most in the story is -- The only way that you could get into this fund was on through being a sophisticated investors they get anybody that asked questions Steve. Was then said no you can't you can't join your asking too many questions and it just seems all these people claim to be sophisticated investors in in yet they didn't ask. Where's the money -- You know on how are you making know how you always making double digit returns in yet. In all these different markets in -- you obviously -- at times have down times with -- some huge financial strategy. How does this is -- want for so."

" Well I I think getting this long term track record and you know that number is that return that even start events seem like a lot now in some years that wasn't. So much money up front about it load double digits 1012%. Something like that there are years where the market was up audience thirty and and the picture in general was this is a low risk strategy at in the really hot project going to be making the big money. But you're going to be taking -- when things get bad you won't be hurt that badly. And you know produce these numbers. Purportedly. For many many many years indeed it's easy to get for individual as sophisticated individual. To get well didn't do that over here apartment looking back on it you can say yes why did not note that in effect. Other people there it is not everybody was completely. But this whole story there were. Questions raised about. Bernie made off you know going back 567 years in. How he was producing these numbers but. The people who had given him money. Didn't seemed to be good for the people who -- raising the big red flags and it was. Lots of wealthy individuals but also institutions to which. They -- there should be a process. That looks very specifically. How people make money and you know when things seem squishy yes start asking questions and that didn't seem to happen -- that that's of more perplexing issue. You know we had mentioned the Shapiro's been. One of the reasons that I believe in it was still sort of shaking all -- operate out. That there's such a big Boston -- for. This guy goes back to. You know Carl Shapiro was 95 years old now and and talk about it a sad story when in 95 and you find out that. Is in the end it you've you've been. -- to -- a great degree like this but he'd opera in the -- that we operated a a company. Trust company. That was sold in the early 1970s. That was kind of the beginning of the money -- he had given to made and he was one of the very very earliest investors in the talks business. And you know is that one of the great ironies is that all this money that he's given away over appeared -- in Boston. Debate off helped him create that fortune to a great degree and now he's on the back end of it and it's you know some portion of it probably. Have at least is disappeared. You know except again we're trying to sort -- with a real numbers are."

" who Steve visit you know if you Kosher or you lost a 145. Million dollars the good news is -- you still have a 145 million of their vote so hopefully. The Shapiro family will be able to continue to. They'll do fine and and continue to benevolence to those who -- don't Boston community. As they have so generously them one question I have -- you know. So -- so -- tall Mariah week we win the the masks mega millions mega millions so on Friday or Saturday night. To -- seven million we were in Ohio we win it where they actually the winners. We have this check now it let's say we took directing the upfront lump sum settlement. And into it okay we get a 150 million of their votes to two port. It lets say you don't want to go to -- fidelity or Merrill interest someplace. Is there any way you can really independently determine. How much. So aware you can put this money and no that this bank statement you're getting on a monthly basis really it's up in the interest of a statement with with the numbers that fix to -- and that the money's really they're in and I'll say is a caveats Steve. I haven't spent a lot of time think about where -- put 150 million dollars because it has been an issue of of the deal with what if I didn't have it."

" don't have that 150 million personalize your new best friend."

" All right well this and by the way thanks to keep me out of these articles because I don't want people don't realize how much money have really lost in this I wish."

" Well -- one of the things if you were it not invested in. A banker at Merrill Lynch account or something like that. And you had a private account to say I hedge funds for example. Typically what happens is that these businesses. Have the actual money is. In custody in it in a large company at Goldman -- someone that is a Independent third party that can't verify and have that money accounted for. -- made off ran it and an actual. Brokerage operation in his business and so it was what does this is a key distinction between him at a typical hedge funds so. You know essentially could be generating his own statements and that was a pretty. Dangerous thing to be still a person client perspective that there is no third party looking in when there's an auditor. Eventually looking unit that these numbers that he's created. You know it was this tiny place that had a couple of employees in this is one of the red flags that people wondered retrospect. Why know what looked at does that in its. There's this gigantic investment operation has you know there's accounting firm working out of a closet you know auditing the numbers -- possibly --"

" So -- Independent verification. No Independent verification here and that's part of the problem here."

" Certainly insufficient. Independent their attention not the kind that that normally you would do. That you would find acceptable what you're making big money investment."

" Steve I'm looking at a list here of and and on a local level the Massachusetts pension fund the comparatively a fairly modest sum but nonetheless. They're caught up in this with about a twelve million dollar loss. And tell me about Banco. Santander. Does that have all local connection of any so but I know it's a Spanish."

" Yeah the Spanish bank that's in the process of buying saw."

" Sovereign that's what I thought. So is that going to does that -- mean sovereign head it's grown ups and announced just you know several weeks ago. There seem to stabilize one Banco came to the rescue you know we increasing their -- did the end of this year and that. In sovereign with some that would allow us of this magnitude throw that out of -- terrorist is still relatively speaking small chance for better."

" It's it's certainly ugly and embarrassing rescind its -- but it's not are there are skilled not any big deal and no nothing to worry about. I think what you look at the kinds of of clients that. That. Very made -- had it it's sort of falls into two groups one is big institutions or pension funds like here in Massachusetts. And they had kind of an indirect way and they were there word fun is that essentially. Redirected their money into -- they're called feeder funds and that's typically how institutions would they would buy into these feeder funds in the money with and off. Apple made up. The others is the Shapiro's of the world and he is typically. Who are very wealthy individuals. Typically. Very wealthy Jewish family is. Very Philanthropic people. You know a new name that. Popped up today in the papers as it sees me Mort Zuckerman. Who has big -- and Boston properties and and and you know the Goldberg apparently. Who won't Stop & Shop for many years. We were able to. See made -- with. Their charitable foundations which have to produced public acts records and and he's in there and whether you know to what degree or not that -- involvement in managing their personal money we don't know but that that's another. Big local connection. -- mentioned earlier the the son in laws of want to have losses. Culture bureau who in fact. I was in the brokerage business and ultimately became. Completely focused. Essentially marketing. -- made -- products and managing relationships with clients and this is done both here in Boston and is a very big Palm Beach connection it in this whole story and there are a lot of a Boston people who are very active in Palm Beach as well and the Shapiro's been made and the Shapiro's son in law. Bob Japanese all had big homes and in Palm Beach and typically the -- each country club was a big. Location in terms of dealing with clients and and marketing of these products and students social. Element of all things."

" will they be dropping the fees for chart enjoying that country clubs."

" That's -- Soft pop pop pop pop up."

" I would say the membership has taken a hit the."

" All right no idea that while one up what a disaster this is say Steve I can tell and you know as grim as the news this for a lot of very generous local families successfully and generous local -- was. This has to be great great story to our compass we'll continue to look Barack your reports on it it certainly got my attention on Saturday and Sunday and appreciate the time. You've given us this Mona. Today's Boston business report with Steve science has been brought to buy SP allies savings bank life insurance is Tedy Bruschi stressful life insurance that is -- us now."