Robert Jaffe (stockbroker)

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Robert M. Jaffe (born 1944) is an American stockbroker who was a longtime associate of Bernard Madoff and promoted Madoff’s fund to wealthy investors in Massachusetts and Florida. He served as vice president of Cohmad Securities Corporation and was married to Ellen Shapiro, daughter of Boston philanthropist Carl J. Shapiro, an early investor and friend of Madoff. Jaffe reportedly persuaded Shapiro to invest about $250 million with Madoff shortly before Madoff’s arrest.

Jaffe helped Cohmad attract investors and accounts for Madoff, bringing in about 150 accounts and more than $1 billion. Madoff paid Jaffe directly from accounts with Madoff at unusually high returns. Jaffe withdrew at least $150 million from 1996 to 2008, and the SEC said he knew Madoff’s trading was fictitious. He has said he earned 1%–2% commissions on an investor’s first profits and paid commissions to advisers who steered cash to Madoff.

In 2009, Massachusetts regulators sued Jaffe and Cohmad. Jaffe testified in February 2009 but invoked the Fifth Amendment, saying he was also a victim. In May 2009, Massachusetts found Cohmad in default for not helping regulators; Cohmad’s securities registration was revoked, a $100,000 fine was imposed, and it was ordered to account for referral fees.

On June 22, 2009, bankruptcy trustee Irving Picard filed a claim against Cohmad, naming Jaffe as a defendant in a suit alleging Cohmad earned hundreds of millions from referrals to Madoff and seeking more than $100 million in payments to Cohmad and more than $105 million in profits withdrawn. The SEC also charged Cohmad with fraud. The agency said Cohmad acted as Madoff’s in-house marketing arm, paid for bringing funds but not for investment gains, and that withdrawals looked like losses until Madoff began paying about $2 million a year to Cohmad from 2002.

In February 2010 the SEC suit was dismissed, but an amended complaint filed in November 2010 again charged Jaffe and Cohmad with misrepresentations. A $550 million settlement was announced on December 7, 2010 between Picard, SIPC, and the Shapiro family, with about $38 million representing the full amount the Trustee demanded from Jaffe related to Cohmad’s role.