birdwatcher (birdwatcher) wrote,

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Bloomberg Top -- Under DiPascali’s supervision, Madoff’s programmers organized accounts on a single IBM AS/400 computer, which would automatically allocate fictitious trades to individual accounts, the SEC said. DiPascali had his staff check trades to make sure the reported prices weren’t too high or low for the day.

To keep regulators at bay, he helped create a random-number generator to make it look like trades of various sizes and prices were being carried out in different time zones.

DiPascali, a resident of Bridgewater, New Jersey, also helped build a “phantom” computer trading platform in case an investor, auditor or regulator requested to see the firm’s trading in action.

In the event of a surprise visit, one employee was supposed to enter fake trades on a computer screen while another hid in a nearby office playing the role of a counterparty from a linked computer. They tested the system, the SEC said, without specifying whether it was used. To avoid detection, Madoff closed accounts of investors who worked at sophisticated financial institutions.
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