Somewhere, an algorithm read the coverage of yesterday's Senate Banking Committee hearing on high-frequency trading, and figured it will take years for the government to hammer out reforms to fix market structure issues.

Stephen Morse, the Barclays executive who ignored employees' warnings that the bank was manipulating its Libor submissions, has been sitting out the ensuing scandal from his post as head of compliance at TD Bank.

The Federal Energy Regulatory Commission said it may suspend JPMorgan's energy trading business for failing to comply with requests for information about the firm's trading profits, Bloomberg reports.

The Securities and Exchange Commission is scrutinizing whether private equity firms are taking more profits than they should, or taking profits too soon. The agency received increased authority over private money managers under Dodd-Frank.

The federal government's mortgage task force, co-headed by New York Attorney General Eric Schneiderman, is getting ready to do ... something?

More than 100 lawmakers have lobbied federal authorities on the implementation of Dodd-Frank, according to The New York Times.

Madoff trustee Irving Picard put checks in the mail yesterday—$2.5 billion in payments to thousands of investors duped by the Ponzi schemer.

Does anyone want to bail out Greece (again)?

Youth unemployment is also on the rise in prosperous northern Europe.

A Brazilian official said that the Federal Reserve's new bond-buying program would set off currency wars—Business Insider explains.

Nomura is eliminating four of 12 investment banking jobs in Dubai, according to Bloomberg, on the heels of the decision to dump a London-based prop trading team.

Britain is considering whether it really wants to be known as the "divorce capital of the world." That means, the Ministry of Justice is reviewing court standards that favor the less-wealthy spouse in split-ups.

Are you reading this from Jeffrey Gundlach's Porsche Carrera 4S? Would you like to make a deal?

The investor who's fallen into Mr. Picard's crosshairs, Jeffry Picower, was a talented money manager, generating $2 billion in returns while banking with Goldman Sachs. So it's a little odd, contends Mr. Picard, that Mr. Picower didn't seem to smell anything fishy about the Madoff fund. Says The Times:

The complaint filed against him last year by the Madoff bankruptcy trustee, Irving H. Picard, asserted that the profits on his investments with Mr. Madoff were equally stellar — but totally bogus. The complaint, which contended that a sophisticated investor like Mr. Picower should have recognized that Mr. Madoff was operating a fraud, sought the return of $7.2 billion — the amount by which Mr. Picower’s withdrawals from his Madoff accounts exceeded the funds he paid in over the life of the fraud.

It certainly does take a very clever investor to buy into a Ponzi scheme and then get out before the whole fraud comes crashing down.

Check out The Most Staggering Wall Street Surprises of 2010.>>

mtaylor [at] observer.com | @mbrookstaylor

• The one Federal Reserve member who thinks printing more money is a bad idea can't shake memories of the horrendous and rampant inflation the U.S. experienced in the 1970s. [NYT]
• The Republicans who just entered Congress may want to put a check on all that money printing, a development that would surely furrow the brow of Fed Chairman Ben Bernanke. [Bloomberg]
• The lawyer for Austrian banker and Bernie Madoff look-alike Sonja Kohn said that the $19.6 billion lawsuit against Kohn by Madoff trustee Irving Picard is a groundless flight of fancy. [WSJ]
• Democrats in Congress are really annoyed with Barack Obama's recent decision to compromise on extensions of the Bush-era tax cuts. [AP]
• Web company Yahoo! -- which is either a national joke or a turnaround story, depending on your point of view -- is preparing for across-the-board job cuts that will impact 5 percent of its workforce. [FT]

mtaylor [at] observer.com | @mbrookstaylor

• Irving Picard, the trustee in charge of reclaiming funds for Bernie Madoff's victims, plans to proceed with lawsuits against beneficiaries of the fraud. He will not be deterred by the suicide of Mark Madoff, Bernie's son, this past weekend. [WSJ]
• If you have been having trouble getting credit lately, you may be in luck. Credit card companies are trying to find riskier borrowers again. Just don't think it'll be anything like a few years ago when anyone with a pulse and a signature could get some plastic. [NYT]
• Two years of coddling Wall Street firms with taxpayer dollars has paid off big (for the Wall Street firms). [Bloomberg]
• On Wednesday, President Barack Obama will convene around 20 CEOs for a meeting to talk about how to create jobs in America. [AP]
• Bank of America is looking to sell $1 billion in toxic assets that it's already written off. One expert says some hedge funds might be interested in buying. [NYPost]

mtaylor [at] observer.com | @mbrookstaylor

The resemblance, in The Observer's opinion, isn't purely ideological. Is it just us, or does Ms. Kohn look a lot like Bernie Madoff wearing a wig? Anyway, here are the details, courtesy The New York Times:

Ms. Kohn led what the trustee's complaint called the Medici Enterprise, a labyrinth of European banks, hedge funds, asset management firms, offshore trusts and shell companies.

In the lawsuit, filed on Friday in Federal Bankruptcy Court in Manhattan, the trustee contended that billions of dollars of other people's money poured into Mr. Madoff's fraud through these conduits - and tens of millions poured out in the form of fees and "kickbacks" to Ms. Kohn from Mr. Madoff.

The 157-page complaint claimed that about half the fraud's stolen funds - $9.1 billion out of an estimated $19.6 billion - was directly attributable to Ms. Kohn, her family members and their elaborate portfolio of so-called feeder funds.

mtaylor [at] observer.com | @mbrookstaylor

Of course, Mr. Picard isn't seeking redress for the team's ignominious standing in major-league baseball. Instead, he's going after Mets owner Fred Wilpon, Sterling Equities and others as part of his effort to collect ill-gotten profits from investors in the Madoff fraud. The Mets' owners have gained about $48 million -- or about two and a half years' salary for center fielder Carlos Beltran -- from the Ponzi scheme.

The Mets owners are the latest to join Mr. Picard's ever-growing list of defendants. JPMorgan Chase and HSBC are also recent entrants.

mtaylor [at] observer.com | @mbrookstaylor

As was the case with Mr. Picard's lawsuit against JPMorgan Chase, the allegations are fairly serious. The Financial Times reports that Madoff issued statements to the bank that included some assertions that might have been cause for some suspicion:

Among other things, the statements included claims that Mr. Madoff was parking investors' cash in a money market fund that ceased to exist in 2005, that trades had settled on non-working days, and at prices outside the reported daily price range.

With this kind of evidence laying around for years before Madoff got caught, it's no wonder the fraudster said it was "amazing" that the Securities and Exchange Commission didn't catch him sooner.

mtaylor [at] observer.com | @mbrookstaylor

The Wall Street Journal reports:

In a statement, Mr. Picard said HSBC and a network of feeder funds in Europe, the Caribbean and Central America directed more than $8.9 billion in the fraudulent investment advisory business to Mr. Madoff's firm. He said they ignored indications that Mr. Madoff engaged in a fraud.

"Had HSBC and the defendants reacted appropriately to such warnings and other obvious badges of fraud outlined in the complaint, the Madoff Ponzi scheme would have collapsed years, billions of dollars and countless victims sooner," Mr. Picard said in a statement. "The defendants were willfully and deliberately blind to the fraud, even after learning about numerous red flags surrounding Madoff."

Big names have been proliferating as Picard's campaign continues. With a few days left before the deadline, who else could get hit?

mtaylor [at] observer.com | @mbrookstaylor

Reuters reports that Picard, who's been rapidly expanding his efforts to claw back investor dollars, is seeking $1 billion in fees and profits, plus $5.4 billion in damages from the banking behemoth. Here's a slice of the cool old-school "wire report":

Madoff trustee says complaint states JP Morgan 'had clear, documented suspicions about the legitimacy of blmis's [Ed: Bernard L. Madoff Investment Securities] operations' * Madoff trustee - on the banking side the complaint charges, JPMC should have been more vigilant in seeing illegal cash flows * Madoff trustee- all recovered monies will be placed into customer fund and distributed, pro rata, to customers with valid claims

More as we get it.

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Update: From the Associated Press, a little more color and a complete sentence:

Picard alleges the bank ignored the fraud and collected fees and profits, even though it had well-documented suspicions about the scam.

mtaylor [at] observer.com | @mbrookstaylor

The bill for Picard's service works out to around $5,000 a day, and fees for his law firm come to more than $283,000 a day, according to court filings. Madoff's victims are objecting to the steep fees, what they call a lack of transparency in the work being done to handle claims, and the fact that Picard has yet to determine "2,995 customer claims constituting $14 billion of the $20 billion of claims the trustee has said he will recognize."

Curiously, a spokesman for Picard told the Post that fees paid to Picard don't come out of the Madoff victims' funds. The Securities Investor Protection Corporation handles that, the spokesman said.