JPMorgan Chase (JPM - option chain) stock is trading lower today after reports have surfaced that senior executives at the bank expressed doubts about the returns of Bernard Madoff's investment business as early as June 2007, 18 months before Madoff's Ponzi scheme collapsed. An internal e-mail from a high-level risk management officer within JPM reported that another bank executive "just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a Ponzi scheme." Despite the suspicions, JPM continued to allow Madoff to move billions of dollars of his investors' cash in and out of his Chase bank accounts until he was arrested for the Ponzi scheme in December 2008. If you think this cloud of suspicion could keep a cap on JPM's stock price in the coming months, then it could be a good time to look at a bearish hedged play on JPM.

This morning, JPM opened at $45.00. So far today the stock has hit a high of $45.17 and a low of $44.50. As of 12:20, JPM is trading at $44.65, down $0.81 (-1.7%). The chart for JPM looks bullish and S&P gives JPM a positive 4 STARS (out of 5) buy ranking.

Do Hewlett Packard (HPQ) printers tell the truth or lie? Do they print out what is actually there or what we actually want to be there?

In fact, HP printers do not print out what they are given; they make the image deeper, darker and richer than it really is. I was a little surprised when I read that. When asked, HP admitted they improve the photos and they are giving the customers what they want.

One of the most common arguments made in defense of the Securities and Exchange Commission's handling of the financial crisis is that the agency is understaffed, and doesn't pay its people well enough to attract talent that can compete with the private sector.

Either that, or SEC employees just need to spend more time finding the next Bernie Madoff and less time looking at naked pictures on the Internet.

Normal tech support phone call: "Press 1 for help with e-mail. Press 2 to have your password reset."

Madoff tech support phone call: "Hello, how can I help you dummy up some trading records today?"

The investigation of Bernie Madoff's fraudulent financial empire is leading to more arrests. Jerome O'Hara and George Perez, both computer programmers employed by the Ponzi schemer, were arrested by the FBI on Friday morning. The charges include conspiracy for falsifying books and records. They are accused of doing the deed for the boss and accepting hush money -- in the form of 25% raises and net bonuses of $60,000 -- to keep the scam afloat.

Another player in the Bernie Madoff saga has fallen. His longtime auditor, David Friehling, pleaded guilty in federal court on Tuesday to charges of securities fraud, investment adviser fraud, making false filings with the SEC, and obstructing or impeding the administration of the Internal Revenue laws (among others).

Despite the plea, Friehling still told U.S. District Judge Alvin K. Hellerstein, "At no time was I ever aware Bernard Madoff was engaged in a Ponzi scheme."

Bernie Madoff is getting used to his new neighbors. Gone are the days of Montauk and Manhattan, and he isn't sharing his space with topless dancers.

Now, he says goodnight to a drug pusher, chills with a former mobster, and hangs with a convicted spy ... and these guys are probably saying, "I hang around with Bernie Madoff." The former financier Ponzi schemer spends his evenings walking laps around the prison track at the Butner Federal Correctional Complex, not far from Raleigh, N.C.

Allen Stanford gets kicked around, but Bernie Madoff can clearly throw down some serious smack. While the former's being moved from one facility to another because he's lost some ground on the cell block, Madoff just earned himself some props.

The engineer of the largest (known) Ponzi scheme in history apparently got into an argument with another geriatric inmate at the Butner, North Carolina federal prison. Of course, it was over the stock market. Does it really make sense to outmaneuver a guy who never needed to know what the market was doing to deliver double-digit returns?

Well, push came to shove, as they say, with the "attacker" stumbling and looking up at a mean, mean Madoff. He got up and ran off.

Even with the ringleader in jail, the pursuit of Bernie Madoff doesn't seem to be finished. Sunday night, the trustee who's winding down the Madoff company said on 60 Minutes that Madoff's two sons (Mark and Andrew), brother (Peter) and niece (Shana) will be slapped with a $198 million suit. They are alleged to have known about the Ponzi scheme, according to the trustee, Irving Picard and his chief counsel, David Sheehan.

Sheehan and Picard are also working under the assumption that there is still some money hidden, quite a lot of it, in fact. Picard told the show, "We'd assume it's millions and millions of dollars." Yet, this probably wouldn't help with the task in front of them.

Disgraced Ponzi schemer Bernie Madoff's (former) Montauk, Long Island home is no longer on the market. A buyer willing to pay more than the $8.75 million asking price has picked up the property, only two weeks after the U.S. Marshals Service listed it for sale.

Anne Lacombe, spokeswoman for the Corcoran Group, a real estate broker involved in the transaction, said the home was under contract for more than asking but did not have information on the exact amount, buyer or closing date, according to the Associated Press.

Looking for a 4,000-square-foot duplex with four fireplaces and a doorman on the Upper East Side of New York? You are in luck, because the U.S. Marshals will put Bernie Madoff's "luxury penthouse" on the market. The apartment is believed to be worth $7 million, so if you have some extra cash laying around, you could find yourself movin' on up to the Upper East Side. A list of the amenities includes ornate cabinets, stainless steel countertops, Baccarat crystal glasses, a winding staircase to the bedroom, an atrium breakfast nook, and a flat-screen TV in one of the bathrooms.

The Fairfield Greenwich Group has agreed to pay an $8 million settlement to a small group of investors in Massachusetts that lost money through the Madoff scam. This is expected to be a full repayment. Fairfield is also going to pay a $500,000 fine to the Commonwealth of Massachusetts. As part of the deal, the feeder fund does not have to admit any wrongdoing.

According to a report in USA Today, this is the first Madoff case in which a regulator secured some relief for investors. While this only addresses a relative handful of investors, the Massachusetts Secretary of State believes that it may become a precedent for other actions.

Fairfield Greenwich Group is trying to play ball, but Massachusetts Secretary of State William Galvin isn't listening.

Instead, he's sending out notices to find all the investors who lost money with Fairfield as a result of its investments in Bernie Madoff's Ponzi scheme. The state does not intend to settle, though negotiations between the state and Fairfield are ongoing.

Bernie Madoff's long-time go-to guy, Frank DiPascali, isn't trying to beat the system any more. He has decided to plead guilty to criminal charges spanning more than two decades.

DiPascali is the first of Madoff's employees to be charged. Aside from Madoff, the only other person greeted by the criminal justice system has been outside auditor David Friehling, who isn't going as easily as DiPascali (he's pled not guilty).

If all goes as planned, DiPascali will plead guilty in U.S. District Court on Monday at 3 PM. For now, everyone's remaining tight-lipped, and the terms have not yet been revealed.

David Friehling is only the second person to face criminal charges in the Bernard Madoff debacle. He served as Madoff's auditor from 1991 to 2008, though it's hard to say if they'll resume their relationship as cellies. For now, Friehling has only been charged (innocent until proven guilty, and such) with securities fraud, abetting investment adviser fraud and filing false reports with the SEC. On five of the six charges filed, he faces a 20-year maximum.

It's alleged that Friehling didn't conduct "meaningful" audits while in Madoff's employ, despite issuing reports saying that he'd done his job -- which paid close to $15,000 a month (no work for big pay . . . where do I sign up?). In particular, he's said to have not bothered to verify Madoff's business assets, revenue sources or bank accounts. This is no-brainer stuff for an auditor.

As you read stories about victims of the Madoff fraud, aren't you glad that you weren't one of them? Why are you so sure that it will never happen to you? How do you know its not happening to you now?

In academic financial research, there's a concept called "agency risk." Agency risk occurs when someone who is acting as your agent has a set of interests that conflict with yours. In investing, agency risk is rampant because one party can often gain from an action that will cause a loss to the investor without the investor even knowing it! Bernie Madoff was an agent of the investors who hired him to manage their money and he was crooked for years until his scheme ended. But investors face plenty of legal, yet sometimes equally dangerous forms of agency risk. It is important to understand them and find ways to mitigate these risks.