Fortune Watch

A judge decided today that the accused mastermind of what is allegedly the largest Ponzi scheme in history will remain free on a $10 million bond but will continue to be under house arrest at his posh Manhattan penthouse.

U.S. prosecutors had asked that Madoff be jailed while awaiting trial on a federal fraud charge. U.S. Magistrate Judge Ronald Ellis ruled that Madoff was not a flight risk and did not pose a threat to society.

Prosecutors had requested that his bail be revoked because Madoff had mailed more than $1 million in jewelry and heirlooms to people over the holidays and apparently had written, but not mailed, millions of dollars of checks to people.

The decision is sure to further outrage investors who have been clamoring for Madoff to be sent to jail for allegedly carrying out the largest financial fraud in history. Prosecutors said the gifts were grounds to have his bail revoked because what’s left of Madoff’s assets will have to be returned to burned investors.

According to the report, Madoff’s new bail conditions include an inventory of his personal property and searches of his mail. The judge ruled that federal prosecutors failed to prove their contention that Madoff posed risks sufficient to merit his incarceration pending trial.

The anxiously awaited decision does put further restrictions on Madoff, including forcing him to come up with a list of items at his apartment and allowing a security firm to check on the items. The security company will also be allowed to search all outgoing mail from Madoff to ensure that no property has been transferred.
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Bolstered by falling oil prices and a rising dollar, US stocks could extend their modest gains next week, even in the face of still troubling consumer- and housing-related data.

Wall Street could extend gains next week if financial results from market bellwethers and data suggest the U.S economic slowdown isn’t as dire as once feared.

A slide in energy prices is a welcome boost in an economy hamstrung by the housing slump and mounting mortgage losses in the financial services sector. In the near term, consumers and business should feel some respite as energy costs recede, boosting prospects for a range of market constituents, including airlines, retail, industrial and technology sectors.

Oil’s downward trend helped boost consumer spending slightly in the past month, with crude hitting a three-month low below $114 a barrel on Friday. But its path remains volatile, prompting some investors to remain cautious about the market.

The dollar’s recent jump suggests to some that the health of the US economy could improve. The US economy began weakening before others and now that investors are seeing poor economic data from Europe and Asia, some think the United States is closer to a recovery than others.

“For the past two years, crude has followed the dollar almost lock-step.”

“The strength we’ve seen in the dollar is almost certainly helping bring crude down. At this point, as you move backward, it actually acts as a stimulus on the economy.”

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