11 December 2008

Bernard Madoff is arrested and charged with fraud in a $50 billion Ponzi scheme.

The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008. In December of that year, Bernard Madoff, the former NASDAQ Chairman and founder of the Wall Street firm Bernard L. Madoff Investment Securities LLC, admitted that the wealth management arm of his business was an elaborate Ponzi scheme.

Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest. The firm employed Madoff’s brother Peter as senior managing director and chief compliance officer, Peter’s daughter Shana Madoff as rules and compliance officer and attorney, and Madoff’s sons Andrew and Mark. Peter has since been sentenced to 10 years in prison, and Mark committed suicide by hanging exactly two years after his father’s arrest.

Alerted by his sons, federal authorities arrested Madoff on December 11, 2008. On March 12, 2009, Madoff pleaded guilty to 11 federal crimes and admitted to operating the largest private Ponzi scheme in history. On June 29, 2009, he was sentenced to 150 years in prison with restitution of $170 billion. According to the original federal charges, Madoff said that his firm had “liabilities of approximately US$50 billion”. Prosecutors estimated the size of the fraud to be $64.8 billion, based on the amounts in the accounts of Madoff’s 4,800 clients as of November 30, 2008. Ignoring opportunity costs and taxes paid on fictitious profits, half of Madoff’s direct investors lost no money, with Madoff’s repeated whistleblower, Harry Markopolos, estimating that at least $35 billion of the money Madoff claimed to have stolen never really existed, but was simply fictional profits he reported to his clients.

Investigators have determined others were involved in the scheme. The U.S. Securities and Exchange Commission has also been criticized for not investigating Madoff more thoroughly. Questions about his firm had been raised as early as 1999. Madoff’s business was one of the top market makers on Wall Street and in 2008 was the sixth-largest.

Madoff’s personal and business asset freeze created a chain reaction throughout the world’s business and philanthropic community, forcing many organizations to at least temporarily close, including the Robert I. Lappin Charitable Foundation, the Picower Foundation, and the JEHT Foundation.

Madoff started his firm in 1960 as a penny stock trader with $5,000, earned from working as a lifeguard and sprinkler installer. His fledgling business began to grow with the assistance of his father-in-law, accountant Saul Alpern, who referred a circle of friends and their families. Initially, the firm made markets via the National Quotation Bureau’s Pink Sheets. To compete with firms that were members of the New York Stock Exchange trading on the stock exchange’s floor, his firm began using innovative computer information technology to disseminate quotes. After a trial run, the technology that the firm helped develop became the NASDAQ. At one point, Madoff Securities was the largest buying-and-selling “market maker” at the NASDAQ.

He was active in the National Association of Securities Dealers, a self-regulatory securities industry organization, serving as the chairman of the board of directors and on the board of governors.

In 1992, The Wall Street Journal described him:

… one of the masters of the off-exchange “third market” and the bane of the New York Stock Exchange. He has built a highly profitable securities firm, Bernard L. Madoff Investment Securities, which siphons a huge volume of stock trades away from the Big Board. The $740 million average daily volume of trades executed electronically by the Madoff firm off the exchange equals 9% of the New York exchange’s. Mr. Madoff’s firm can execute trades so quickly and cheaply that it actually pays other brokerage firms a penny a share to execute their customers’ orders, profiting from the spread between bid and asked prices that most stocks trade for.

—?Randall Smith, Wall Street Journal

Several family members worked for him. His younger brother, Peter, was senior managing director and chief compliance officer, and Peter’s daughter, Shana Madoff, was the compliance attorney. Madoff’s sons, Mark and Andrew, worked in the trading section, along with Charles Weiner, Madoff’s nephew. Andrew Madoff had invested his own money in his father’s fund, but Mark stopped in about 2001.

Federal investigators believe the fraud in the investment management division and advisory division may have begun in the 1970s. However, Madoff himself stated his fraudulent activities began in the 1990s.

In the 1980s, Madoff’s market-maker division traded up to 5% of the total volume made on the New York Stock Exchange. Madoff was “the first prominent practitioner” of payment for order flow, paying brokers to execute their clients’ orders through his brokerage, a practice some have called a “legal kickback”. This practice gave Madoff the distinction of being the largest dealer in NYSE-listed stocks in the U.S., trading about 15% of transaction volume. Academics have questioned the ethics of these payments. Madoff has argued that these payments did not alter the price that the customer received. He viewed payments for order flow as a normal business practice: “If your girlfriend goes to buy stockings at a supermarket, the racks that display those stockings are usually paid for by the company that manufactured the stockings. Order flow is an issue that attracted a lot of attention but is grossly overrated.”

By 2000, Madoff Securities, one of the top traders of US securities, held approximately $300 million in assets. The business occupied three floors of the Lipstick Building, with the investment management division, referred to as the “hedge fund”, employing a staff of approximately 24. Madoff ran a branch office in London that employed 28 people, separate from Madoff Securities. The company handled investments for his family of approximately £80 million. Two remote cameras installed in the London office permitted Madoff to monitor events from New York.

10 December 1884

The Adventures of Huckleberry Finn by Mark Twain is published.

Adventures of Huckleberry Finn is a novel by Mark Twain, first published in the United Kingdom in December 1884 and in the United States in February 1885. Commonly named among the Great American Novels, the work is among the first in major American literature to be written throughout in vernacular English, characterized by local color regionalism. It is told in the first person by Huckleberry “Huck” Finn, the narrator of two other Twain novels and a friend of Tom Sawyer. It is a direct sequel to The Adventures of Tom Sawyer.

The book is noted for its colorful description of people and places along the Mississippi River. Set in a Southern antebellum society that had ceased to exist about 20 years before the work was published, Adventures of Huckleberry Finn is an often scathing satire on entrenched attitudes, particularly racism.

Perennially popular with readers, Adventures of Huckleberry Finn has also been the continued object of study by literary critics since its publication. The book was widely criticized upon release because of its extensive use of coarse language. Throughout the 20th century, and despite arguments that the protagonist and the tenor of the book are anti-racist, criticism of the book continued due to both its perceived use of racial stereotypes and its frequent use of the racial slur “nigger”.

Twain initially conceived of the work as a sequel to The Adventures of Tom Sawyer that would follow Huckleberry Finn through adulthood. Beginning with a few pages he had removed from the earlier novel, Twain began work on a manuscript he originally titled Huckleberry Finn’s Autobiography. Twain worked on the manuscript off and on for the next several years, ultimately abandoning his original plan of following Huck’s development into adulthood. He appeared to have lost interest in the manuscript while it was in progress, and set it aside for several years. After making a trip down the Hudson River, Twain returned to his work on the novel. Upon completion, the novel’s title closely paralleled its predecessor’s: Adventures of Huckleberry Finn.

Mark Twain composed the story in pen on notepaper between 1876 and 1883. Paul Needham, who supervised the authentication of the manuscript for Sotheby’s books and manuscripts department in New York in 1991, stated, “What you see is attempt to move away from pure literary writing to dialect writing”. For example, Twain revised the opening line of Huck Finn three times. He initially wrote, “You will not know about me”, which he changed to, “You do not know about me”, before settling on the final version, “You don’t know about me, without you have read a book by the name of ‘The Adventures of Tom Sawyer’; but that ain’t no matter.” The revisions also show how Twain reworked his material to strengthen the characters of Huck and Jim, as well as his sensitivity to the then-current debate over literacy and voting.

A later version was the first typewritten manuscript delivered to a printer.

Demand for the book spread outside of the United States. Adventures of Huckleberry Finn was eventually published on December 10, 1884, in Canada and the United Kingdom, and on February 18, 1885, in the United States. The illustration on page 283 became a point of issue after an engraver, whose identity was never discovered, made a last-minute addition to the printing plate of Kemble’s picture of old Silas Phelps, which drew attention to Phelps’ groin. Thirty thousand copies of the book had been printed before the obscenity was discovered. A new plate was made to correct the illustration and repair the existing copies.

In 1885, the Buffalo Public Library’s curator, James Fraser Gluck, approached Twain to donate the manuscript to the library. Twain did so. Later it was believed that half of the pages had been misplaced by the printer. In 1991, the missing first half turned up in a steamer trunk owned by descendants of Gluck’s. The library successfully claimed possession and, in 1994, opened the Mark Twain Room to showcase the treasure.

In relation to the literary climate at the time of the book’s publication in 1885, Henry Nash Smith describes the importance of Mark Twain’s already established reputation as a “professional humorist”, having already published over a dozen other works. Smith suggests that while the “dismantling of the decadent Romanticism of the later nineteenth century was a necessary operation,” Adventures of Huckleberry Finn illustrated “previously inaccessible resources of imaginative power, but also made vernacular language, with its new sources of pleasure and new energy, available for American prose and poetry in the twentieth century.”

9 December 1835

The Texian Army captures San Antonio, Texas.

Inspired by the spirited leadership of Benjamin Rush Milam, the newly created Texan Army takes possession of the city of San Antonio, an important victory for the Republic of Texas in its war for independence from Mexico.

Milam was born in 1788 in Frankfort, Kentucky. He became a citizen and soldier of Mexico in 1824, when newly independent Mexico was still under a republican constitution. Like many Americans who immigrated to the Mexican state of Texas, Milam found that the government both welcomed and feared the growing numbers of Americans, and treated them with uneven fairness. When Milam heard in 1835 that Santa Ana had overthrown the Mexican republic and established himself as dictator, Milam renounced his Mexican citizenship and joined the rag-tag army of the newly proclaimed independent Republic of Texas.

After helping the Texas Army capture the city of Goliad, Milam went on a reconnaissance mission to the southwest but returned to join the army for its planned attack on San Antonio-only to learn that the generals were postponing the attack on San Antonio for the winter. Aware that Santa Ana’s forces were racing toward Texas to suppress the rebellion, Milam worried that any hesitation would spell the end of the revolution. Milam made an impassioned call for volunteers, asking: “Who will go with old Ben Milam into San Antonio?”

Inspired by Milam’s bold challenge, three hundred men did volunteer, and the Texas Army began its attack on San Antonio at dawn on December 5. By December 9, the defending forces of the Mexican army were badly beaten, and the commanding general surrendered the city. Milam, however, was not there to witness the results of his leadership–he was killed instantly by a sniper bullet on December 7. If Milam had survived, he might well have been among the doomed defenders of the Alamo that were wiped out by Santa Ana’s troops the following March.

8 December 1955

The Flag of Europe is adopted by Council of Europe.

The Flag of Europe, or European Flag is the flag of Europe. It consists of a circle of 12 golden stars on an azure background. It is an official symbol of two separate organizations — the Council of Europe and the European Union — both of which term it the “Flag of Europe” or the “European Flag”. It was first adopted in 1955 by the Council of Europe to represent the European continent as a whole. Due to the subsequent emergence of the EU, the flag is sometimes colloquially known as the “flag of the European Union”, but this term is not official.

The flag was designed in 1955, and officially launched later that year by the Council of Europe as a symbol for the whole of Europe. The Council of Europe urged it to be adopted by other European organisations, and in 1985 the European Economic Community adopted it as its own flag (having had no flag of its own before) at the initiative of the European Parliament.

The flag is not mentioned in the EU’s treaties, its incorporation being dropped along with the European Constitution, but it is formally adopted in law. The Council of Europe has a distinctive “Council of Europe Logo” to uniquely identify the organisation, which employs a lower-case “e” in the centre. The logo is not meant to be a substitute for the flag, which the Council flies in front of and in its headquarters, annexes and field office premises.

Since its adoption by the European Union, it has become broadly associated with the supranational organisation due to its high profile and heavy usage of the emblem. However, the flag is sometimes use in its wider denotation, for example representing Europe in sporting events and as a pro-democracy banner. It has partly inspired other flags, such as those of other European organisations and those of sovereign states where the EU has been heavily involved.

The search for a symbol began in 1950 when a committee was set up in order to look into the question of a European flag. There were numerous proposals but a clear theme for stars and circles emerged. Count Richard Nikolaus von Coudenhove-Kalergi proposed that they adopt the flag of his International Paneuropean Union, which was a blue field, with a red cross inside an orange circle at the centre, which he had himself recently adopted for the European Parliamentary Union. Due to the cross symbolism, this was rejected by Turkey. Kalergi then suggested adding a crescent to the cross design, to overcome the Muslim objections. Another organisation’s flag was the European Movement, which had a large green E on a white background. A further design was one based on the Olympic rings: eight silver rings on a blue background. It was rejected due to the rings’ similarity with “dial”, “chain” and “zeros”. One proposal had a large yellow star on a blue background, but it was rejected due to its similarity with the so-called Burnet flag and the flag of the Belgian Congo.

The Consultative Assembly narrowed their choice to two designs. One was by Salvador de Madariaga, the founder of the College of Europe, who suggested a constellation of stars on a blue background. He had circulated his flag round many European capitals and the concept had found favour. The second was a variant by Arsène Heitz, who worked for the Council’s postal service and had submitted dozens of designs; the design of his that was accepted by the Assembly was similar to Salvador de Madariaga’s, but rather than a constellation, the stars were arranged in a circle. In 1987, Heitz claimed that his inspiration had been the crown of twelve stars of the Woman of the Apocalypse, often found in Marian iconography.

The Consultative Assembly favoured Heitz’s design. However, the flag the Assembly chose had fifteen stars, reflecting the number of states of the Council of Europe. The Consultative Assembly chose this flag and recommended the Council of Europe to adopt it. The Committee of Ministers agreed with the Assembly that the flag should be a circle of stars, but the number was a source of contention. The number twelve was chosen, and Paul M. G. Lévy drew up the exact design of the new flag as it is today. The Parliamentary Assembly of the Council of Europe approved it on 25 October 1955. Adopted on 8 December 1955, the flag was unveiled at the Château de la Muette in Paris on 13 December 1955.

7 December 2017

The Marriage Amendment Bill to recognize same sex marriage passes in Australia.

Same-sex marriage has been legal in Australia since 9 December 2017. The legislation to allow same-sex marriage, the Marriage Amendment Act 2017, passed the Australian Parliament on 7 December 2017 and received royal assent from the Governor-General the following day. The law came into effect on 9 December, immediately recognising overseas same-sex marriages. The first same-sex wedding under Australian law was held on 15 December 2017. The passage of the law followed a voluntary postal survey of all Australians, in which 61.6% of respondents supported same-sex marriage.

Other types of recognition for same-sex couples are also available. Under federal law, same-sex couples can also be recognised as de facto relationships, which provide most of the same rights and responsibilities afforded to married couples, although those rights may be difficult to assert and are not always recognised in practice. Although there is no national civil union or relationships register scheme in Australia, most states and territories have legislated for civil unions or domestic partnership registries. Such unions are recognised as de facto relationships under federal law.

Prior to legalisation, 22 same-sex marriage related bills were introduced to Parliament between September 2004 and May 2017, none of which passed into law. These failed attempts came after the Howard Government amended the law in August 2004 to exclude same-sex marriages. The Australian Capital Territory passed a same-sex marriage law in December 2013, though this was struck down by the High Court on the grounds that such a law could only be introduced by the Commonwealth.

De facto relationships, defined in the federal Family Law Act 1975, are available to both same-sex and opposite-sex couples. De facto relationships provide couples who are living together on a genuine domestic basis with many of the same rights and benefits as married couples. Two people can become a de facto couple by entering into a registered relationship or by being assessed as such by the Family Court or Federal Circuit Court. Couples who are living together are generally recognised as a de facto relationship and thus able to claim many of the rights and benefits of a married couple, even if they have not registered or officially documented their relationship.