[ by Howard Haykin ] Peter Madoff, Bernie's "Brother-in-Crime," has reached a settlement with the SEC over the Securities Act and Investment Advisers Act violations to which he confessed. Background of Respondent, Peter Madoff. A long-time employee of Bernard L. Madoff Investment Securities LLC ("BMIS"), and an attorney.  After graduating from law school in 1970, Peter, now 66 and a resident of Old Westbury, became the firm’s chief compliance officer and Senior Managing Director.  He also was the lead trader in BMIS’s market making and prop trading operations for a significant period of time.  He has held several securities licenses, including:  Series 1 (general securities rep), Series 4 (options), and Series 55 (equity trader). BMIS. Registered with the SEC as a Broker-Dealer in 1960, and as an Investment Adviser in August 2006.  BMIS purportedly engaged in 3 different operations - investment advisory ("IA") operations, market-making, and proprietary trading.  BMIS is currently under the control of a trustee appointed pursuant to the Securities Investor Protection Act of 1970 (15 U.S.C. § 78aaa et seq.). Guilty Plea. On 6/29/12, Peter pleaded guilty to conspiracy to: (a) commit securities fraud; (b) falsify records of an investment adviser; (c) falsify records of a broker-dealer;  (d) make false filings with the Commission; (e) commit mail fraud; (f) falsify statements in relation to documents required by ERISA; and, (g) obstruct and impede the lawful governmental function of the IRS.  He further pleaded guilty to falsifying records of an investment adviser. While Bernie operated a long-standing Ponzi scheme through the firm, and confessed to that crime, brother Peter has claimed he knew nothing about it. Peter did plead guilty to having committed violations in the following areas:

• created false and misleading entries in numerous documents at BMIS that were designed to make it appear that Respondent performed various compliance reviews of BMIS’s IA operations and that BMIS maintained an effective compliance program.  Respondent’s false and misleading statements made it appear to regulators and the firm’s advisory clients that BMIS actually had a CCO who performed required compliance functions, when in reality Respondent did nothing of the sort;

• created annual reports in or about 2006 and 2007 pursuant to NASD Rules 3012 and 3013 which falsely stated that he had performed a comprehensive compliance review of all aspects of BMIS’s operations, including its IA Operations;

• from at least ~ 2006 through 2008, Madoff represented to the firm’s investment advisory clients that he was the CCO for the IA operations;

• from August 2006 through 2008, Madoff created and caused to be filed with the SEC false and misleading Forms ADV; and

• in or about December 2008, after Madoff learned that BMIS could not meet redemption requests, and shortly before BMIS collapsed, Madoff reviewed lists reflecting preferred employees, family members, and certain other IA clients and, with brother Bernie, decided who should receive BMIS’s remaining funds and caused checks to be prepared for these selected clients. The firm collapsed before these checks were mailed.

Settlement Terms, Conditions. The SEC agreed to accept Peter Madoff’s Offer, which is subject to court approval.  For the above mentioned violations, Peter Madoff is barred from the industry; and barred from participating in any offering of a penny stock. Any reapplication for association by the Respondent will be subject to certain conditions that Peter Madoff must adhere to. For further details , go to:  [SEC Admin. Proceeding 3-14963, 7/26/12].