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Brandeis University's Community Newspaper — Waltham, Mass.

‘Friend of univ.’ charged with securities fraud

Published: June 24, 2009
Section: Front Page

Long time friend and donor to Brandeis Robert M. Jaffe was charged with securities fraud Monday by the Securities and Exchange Commission in connection with Bernie Madoff.

Jaffe has been charged with allegedly ignoring signs of Madoff’s fraud as he funneled $ 1 billion from as many as 1,000 client funds to the convicted ponzi-artist.

In a statement to the Boston Globe, the SEC said that the brokerage firm Jaffe worked for marked investments with Madoff “while knowingly or recklessly disregarding facts indicating that Madoff was operating a fraud.”

Jaffe’s relationship to the university was first reported by The Hoot on Jan. 16, while he was under investigation by the state of Massachusetts. At that time, University Executive Vice President and Chief Operating Officer Peter B. French wrote in an e-mail to The Hoot that Jaffe had been “long considered a friend of the university, though he is not a regular donor.”

Additionally, The Hoot reported that Jaffe was recognized by the university in the 1980’s as being a member of the President’s council—an honorary society that recognizes service to the university but “has no specific functional role at Brandeis and has not been active for several years,” French wrote in January.

The SEC complaint alleges that Jaffe was sought out by Madoff to run his Boston operation because he is the son-in-law of Carl and Ruth Shapiro. The Shapiros are the university’s largest donors and have donated $80 million to the university since its foundation.

Carl and Ruth Shapiro were themselves victims of the ponzi-scheme and have said they will refrain from contributing to the university until at least 2010.

The complaint was filed Monday in the US District Court for the Southern District of New York, and includes statements by regulators who claim that Jaffe earned $50 million for his referrals to Madoff over the past 12 years in the form of investment returns in his personal Madoff accounts.

The Globe reported that he saw annual gains of up to 46 percent. His clients received returns of 12 to 18 percent.