The New York Times reports that the trustee charged with making sense of the Bernard Madoff scam has asked a court for unusual subpoena powers. There's a sense of urgency attached to the request; allegedly Madoff was making plans to accept large amounts of money very near the time he was confessing his Ponzi scheme to his sons, who eventually turned him in.

FINRA has found that two units of E-Trade did not have adequate anti-money laundering programs in place. Such policies and procedures "could not reasonably be expected to detect and cause the reporting of suspicious securities transactions." The lack of automated tools was noted. Article

How bad is it going to get for the asset management industry? A new study from Casey Quirk says that asset-based fees will fall 25 percent between 2007 and 2009. That will have a seismic affect on operating profits, which will drop 30 to 35 percent between 2007 and 2008, and another additional 30 to 35 percent in 2009, if costs are not cut significantly. Margins would decline from 33 percent of revenues in 2007 to just 22 percent in 2009.

Not too long ago, portable alpha was the hot trend in the institutional universe. Some big pensions embraced the approach--to spectacular results. The Pennsylvania State Employees Retirement System (SERS) was among the winners; it posted a 17 percent return in 2007. But AllAboutAlpha.com notes that SERS is now eating a bit of crow, and people are wondering if the portable alpha movement has been really oversold.

We've noted that Carl Icahn--who is none too pleased with how his Realogy PIK toggle bonds were being treated--sued to stop Realogy, controlled by Apollo, from issuing more bonds that would be more secure, but worth far less.