Between 1996 and 2008, Jaffe withdrew at least $150 million, and the U.S. Securities and Exchange Commission (SEC) claims he was aware Madoff was engaged in fictitious trading.
Jaffe was named as a defendant among more than two dozen individuals and trusts in U.S. Bankruptcy Court in New York.
[10] The lawsuit claims that up to 90 percent of Cohmad's income came from referring clients and that the firm had a "symbiotic" relationship with Madoff, having earned hundreds of millions of dollars from the fraud.
[3] The case is Picard v. Cohmad Securities Corp., 09-AP-1305, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
[11] On June 22, 2009, the SEC also filed civil fraud charges[12] against Cohmad, and Jaffe was also named as a defendant.
[3] In February 2010, the SEC lawsuit was dismissed, with the judge noting, "There is nothing inherently fraudulent about referring customers to an investment adviser for fees.
"[13] In November 2010, the SEC filed an amended complaint, charging Jaffe and Cohmad with "material misrepresentations and omissions.