March 5, 2009 / 10:44 PM / 11 years ago

Massachusetts seeks default judgment vs. Cohmad

BOSTON (Reuters) - Massachusetts’ top securities regulator raised the pressure on accused financial swindler Bernard Madoff on Thursday by asking a judge to put Cohmad Securities out of business in the state.

Secretary of State William Galvin, who has called Cohmad Securities a feeder fund for Madoff’s alleged $50 billion Ponzi scheme, sought a default judgment against the New York-based firm on Thursday.

If approved, a judge would suspend Cohmad’s license to do business in Massachusetts, require the firm to hand over the names of all Massachusetts investors, and order the firm to pay a fine.

The move comes days after Galvin filed an administrative complaint that sought to revoke Cohmad’s license.

Cohmad filed a motion saying that it could not answer Galvin because the state’s accusations are “vague.”

Galvin became one of the first state regulators to probe the fraud when he ordered Madoff to turn over all records relating to money he managed for state residents. Cohmad was co-owned by Madoff and was set up primarily to attract clients for him.

Reporting by Svea Herbst-Bayliss, editing by Matthew Lewis

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