urltoken is a canadian company , which publishes reviews written by homeowners about home improvement professionals such as repairman , contractors , renovators , and retailers .

homestars was formed in 2006 by nancy peterson .

the globe and mail ran a feature on the company shortly after its foundation .

the company began as an online community of homeowners , sharing reviews of their personal experience to help other homeowners find reputable contractors .

each review can contain details on the delivery of the work , contractor ’s work habits and the quality of the follow-up .

similar to other review sites such as tripadvisor , contractors are able to respond to any reviews that are written about them .

the national post announced in 2015 , that homestars had over two million companies listed on its website and hundreds of thousands of consumer reviews about those contractors .

in 2015 , profitguide ranked homestars as the 77th fastest growing company in canada .

founder and ceo , nancy peterson , also won an award in 2015 as one of canada 's top female entrepreneurs , where she ranked in 71st position .

homestars

with the acquisition of homestars , homeadvisor strengthens its north american market leadership position in digital marketplaces dedicated to home services . homestars joins homeadvisor market leaders in
company profile information is not moderated by homestars . ask the contractor to verify before hiring .
the reviews on this page are the subjective opinion of the author and not of homestars inc .
a lot of reviews on homestars are very positive . is the platform as effective as it could be ?
plus , homestars is an easy way for companies to reach out to new customers . between mid - july and mid - october this year , 100 , 000 companies in the gta were contacted through homestars . com .
nancy peterson , co - founder and ceo of homestars . com , poses for a portrait at the head office in toronto
gardin had experience . he had accolades from homestars . com . and , until the collapse , he had impeccable references .
, a proprietary score out of 100 % that grades each home improvement company . to learn more , visit @ homestars on
homestars worked hard to change that perception . how a company responds to a negative review can build its credibility , peterson explains .
homestars : a website where homeowners can post reviews of contractors , painters , electricians , plumbers and other renovation - related service providers .
to fund homestars , she used her own savings , took out a loan and then fundraised among friends , family and angel investors .
a feast for crows if you ' re a lawyer . homestars has introduced a bully warning for businesses that have sent it or reviewers legal letters .
canada ' s largest & most - trusted website for connecting with home service professionals . find a pro & start your next project on homestars . # yougotthis
we receive hundreds of reviews every week from people just like you . see what fellow homestars users are up to in this review round up ! click here to write a review :
with canadian cities now packed with reviews , the company is turning its attention to the united states . over the next 12 months , homestars plans to start building its reviews of companies in american cities .
in this month ' s small business success stories profile , we spoke to nancy peterson , the co - founder and ceo of homestars , an community of homeowners and home improvement companies throughout canada and the u . s .
a quarter of companies have taken legal action over online reviews . in nine - tenths of cases where a review is removed , it is because of a threatening legal letter , says canadian home - improvement ratings site homestars .
we receive hundreds of reviews every week from people just like you . see what fellow homestars users are up to in this review round up ! ready to write a review of your own ? click here to get started :
tonight , homestars founder and ceo , nancy peterson , will be speaking at tech toronto ' s july meetup . check it out if you ' re interested in hearing from some of toronto’s tech leaders , innovators , and enthusiasts .
however , even sites like homestars can have their problems . one issue that zavitz has come across is the fact that most contractors with 10 - star reviews will be booked for months in advance and unavailable to take on new jobs .
“we backtracked and really focused on toronto and the golden horseshoe , ” peterson says . then , as toronto really started to pick up the next year , homestars began to focus on building reviews from vancouver , calgary , ottawa and hamilton .
from the beginning , homestars has encouraged companies to respond to reviews on the site “because when people are reading reviews , they are going to trust the company that is responding and also being accountable for a bad review , ” peterson says .
when planning the business , peterson searched for people with complementary skills . that ' s how she met andrew goodman . the consultant , who specializes in search engine marketing , is a co - founder of homestars and plays a strategic role in the company .
early on , homestars also put together a team of advisors , people with a wealth of experience and contacts . aside from their contacts , the advisors are very helpful to bounce ideas off , peterson says . “it ' s good to get outside opinions . ”
we have a chinese wall [ an information barrier to prevent conflict of interest ] between our sales team and our content team . homestars is really for homeowners and our number one stakeholder is ensuring that we have a trustworthy site they can rely on to help them make better decisions .
initially , homestars was launched with a dot - ca domain , which made sense since the site was geared to toronto . “but our vision was to really scale this up in multiple cities across north america . we realized we needed a dot - com domain , ” peterson says .
to help spread the word about the website , homestars is active in many charitable events . it also participates in home shows . with up to 40 , 000 homeowners under one roof for four days , home shows are a great way to meet homeowners and facilitate reviews , peterson says .
instead of simply searching the internet at large , zavitz recommends using a site like urltoken to narrow down your search field . homestars is
a really good shortcut to finding a good contractor because you ' re getting genuine , unfiltered feedback from clients that they ' ve had ,
he says .
while the company ' s mission is to help homeowners get the best - rated tradespeople for their projects , it ' s the contractors and vendors who provide the revenue by advertising on the homestars website . good reviews are a powerful driver for business so a connection with homestars can be highly beneficial – or not , if they garnered negative comments . there ' s no charge to the homeowners using the site or any obligation to write a review although users are encouraged to contribute , both positively and negatively . the company currently has hundreds of thousands of reviews specifically relating to major cities across canada , excluding quebec .
although homestars has encouraged homeowners to post reviews since the beginning , there have been changes to the site over time . in the first year , it focused exclusively on toronto . there was also a book version , but it quickly became out of date . the company axed the book to focus on the website .
word of mouth is often considered the best source for finding home renovation professionals . unfortunately , it ' s not always possible to get a referral from friends or neighbours . that ' s why homeowner nancy peterson started www . homestars . ca , an online resource listing that lets homeowners post reviews of companies providing home - related products and services .
. it ' s a free service helping homeowners find reputable professionals through its database of two million companies and hundreds of thousands of reviews . homeowners write reviews based on their home improvement experiences - - both good and bad - - to help others make better hiring decisions . the integrity team at homestars validates every review before it is published . homeowner ratings , as well as many other data points , form the basis of
as a first - time home buyer , nancy peterson was just as confused as anyone when it came to renovating . despite being a corporate executive armed with an mba , she found the decision - making around who to hire
absolutely daunting .
that became her inspiration for co - founding home stars directory inc . , known as homestars , in 2006 – a toronto - based private company that posts online reviews by home - owners about their local home - improvement experiences .
companies may threaten libel or slander when somebody ' s written something negative . with homeowners in mind , we ' ll review these before they go up to make sure they ' re meeting the criteria . our legal team will reach out and help them write it in such a way that if they had to go to court , they ' d be able to defend it . truth is an absolute defense . we go through these thorough steps learned over the years to protect the review writers and homestars from hundreds of lawsuits .
a i called my contacts and because it was such a novel idea i got in front of venture capitalists fairly easily . writing business plans is a massive strength and i brought that discipline to homestars . we plan quarterly , semi - annually and annually . that is a big piece : when you are going in front of money , you have to have your answers down . i ended up getting a term sheet but did not close it , which was lucky because i would have been left a 35 per cent owner . i took that term sheet , which was a valuation of $ 2 million , and parlayed it into an angel round valuation of $ 1 . 75 million . i was able to close my first round of financing in 2007 for about $ 500 , 000 .
a we sell paid listings . we have 250 , 000 companies listed in canada and they are all basic , unpaid listings . if they subscribe to a paid listing , they can upload a logo , photos of their work and there are more tools for them to use . an account manager educates them on how to use our mobile app , for example , where companies can take before and after photos of current projects , write a description and text homeowners who can then either give permission or not to post them on homestars . we have several thousand paid subscribers now in major cities across canada . the first priority , however , is building trustworthy content . we have a lot of technology built around making sure the reviews are coming from real homeowners . our filters screen out spam ; 25 per cent of the information we receive never gets published and we have moderators that read and decide if they are going to investigate .
it ' s the same way you would choose your friends , in a way ,
says zavitz .
you have to use your intuition .
if you ' ve ever hired a contractor for any type of project , you ' ll know that choosing the right person is the most important thing you can do to ensure the job gets done right . unfortunately , many homeowners , especially those who are buying in a new area , simply don ' t know where to start when it comes to finding the right person for the job .
there are plenty of good contractors out there , so why is finding a good one so difficult sometimes ? brian zavitz , a contractor with over 20 years of experience , and the author of the ebook
the homeowner ' s guide to finding a contractor ,
thinks that most people simply don ' t realize how important finding the right contractor is .
people don ' t treat finding a good contractor as a skill to be learned ,
he says . instead , most people take what he calls the
shotgun approach ,
where they simply ask a contractor :
when can you start , how long will it take , and how much will it cost ?
while it ' s important to get quotes before beginning a project , there ' s much more that goes into finding a good contractor than taking the
shotgun approach .
so in order to help you make the right decision for your next project , here are 10 tips you can use to find a great contractor .
the days of finding contractors in the yellow pages are over , but nowadays instead of pulling out the phone book , most people turn to google . according to zavitz , however , this is not a good way to begin your search .
i don ' t think that going to a contractor ' s website is useful in the least ,
he says . while positive testimonials on a contractor ' s website can be a good sign , zavitz points out that
they can be falsified .
my recommendation for something like that is to be patient ,
he says .
don ' t go for the people who are getting 10 stars , go for the people who are getting 8 . 5 stars out of 10 , and read the reviews .
rather than simply looking at star ratings , carefully reading reviews can actually give you a better idea of how a contractor will work with you .
another search method to stay away from is picking a contractor based on a flyer you ' ve received in the mail .
i advise never to engage a contractor who you find out through a flyer that comes to your mailbox ,
zavitz says .
this doesn ' t mean that all contractors who send out flyers are bad contractors , but , zavitz says ,
there ' s such a possible high concentration of bad experiences coming that way that i say it ' s best to avoid it altogether .
ultimately , zavitz says ,
the people who are good in just about any market do not need to advertise .
if the internet and your mailbox can ' t be trusted , then who can be trusted ? in most cases , the best way to find a contractor is through word of mouth . however , not just any word of mouth will do – getting a recommendation from your neighbour who had someone help them build a fence is much different than getting a recommendation from someone who actually works in the construction industry . if you have a plumber , electrician , or other tradesperson you trust , ask them who they would hire as a contractor to work on their home .
no matter how big or small of a job you ' re planning , it ' s always a good idea to seek out multiple quotes before making your final decision . how many quotes should you get ? that depends on how big the job is .
at the very least , talk to no fewer than three different contractors ,
says zavitz . the larger the project , the more quotes you should solicit .
you have to weigh the potential for loss ,
he says . if it ' s a small renovation , then you have less to lose if you make the wrong choice , but if you ' re planning a major project , you ' ll be well served by soliciting as many quotes as you can , within a reasonable timeframe .
people focus on price ; that ' s a mistake ,
says zavitz . while price is always a factor that must be taken in to consideration , simply choosing the contractor who gives you the best quote is not the best way to find the right person for the job . in fact , this can often lead to problems later ; a price that ' s much lower than the comparables could be a sign of an inexperienced contractor , or worse , an unscrupulous one .
knowing what questions to ask a contractor during your initial meeting with them can help you narrow down your list of choices . here are a few good questions to use :
first , ask the contractor how much advertising they do .
it ' s a trick question ,
says zavitz ; if the contractor just wants to impress you , he or she will start bragging about how much they spend on advertising . however , as zavitz has explained , this is usually a bad sign , and will give you an indication that you may not want to work with this person .
another important issue to ask about is how the contractor deals with unexpected issues . issues beyond anyone ' s control will arise with any major renovation project , and a good contractor is not one who avoids these issues altogether , as this can be impossible to do , but one who takes the initiative to resolve the issues as quickly as possible , without giving the client anything to worry about .
major renovations can be very stressful , and a good contractor has to be a bit of a psychologist ,
zavitz says .
for more tips like these , you can refer to the list of sample questions provided in zavitz ' s ebook .
sometimes , bad contractor - client relationships can actually stem from a bad client , and not the other way around . what makes a bad client ? there are a variety of issues at play , but the biggest factor usually comes down to clear communication . are you clear about exactly what you want to be done ? do you fully understand the size and extent of the work you ' re asking for , and can you communicate that properly to your contractor ? the more straightforward and transparent you can be , the more likely you ' ll get an accurate quote , and the more likely end up with a finished product you ' re happy with as well .
another important factor to pay attention to when speaking to a contractor is their general attitude and demeanour .
it ' s the same way you would choose your friends , in a way ,
says zavitz .
you have to use your intuition .
some things to pay attention to are how much they listen , and how honestly they answer your questions . sometimes , admitting you don ' t know the answer to something can actually be a sign of wisdom rather than a sign of weakness .
the final step in choosing the right contractor is simply to have fun and enjoy the process . after all , you ' re making your living space more wonderful , so you might as well have a good time while you ' re at it .
and in the end , if you do end up with a bad contractor , you can always chalk it up to experience .
good judgement comes from experience , and a lot of that comes from bad judgement ,
says zavitz , quoting will rogers . so don ' t worry too much about making mistakes ; as long as you learn from them , mistakes will only help you grow .
a friend of mine recently found his contractor to redo his kitchen in the paper edition of the yellow pages ! his approach was that he wanted an experienced contractor ; and it is less likely that new companies will pay for paper ads . older contractors running small businesses never turned to online advertising as they keep on getting jobs from word of mouth . i think it links to ‘ be wary of advertising’ . though it was a brilliant idea . guillaume – urltoken
great article , it’s very important to find a good contractor and i absolutely agree that experienced contractors don’t need advertising .
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the subject who is truly loyal to the chief magistrate will neither advise nor submit to arbitrary measures .
with 50 employees and current annual revenue at close to $ 5 - million , the company has grown 50 per cent year over year for the past three years .
ms . peterson , 49 , who ' s also the ceo , previously worked in senior management positions for p & g and then kraft foods for 12 years , on brands such as nabob coffee , philadelphia cream cheese and toblerone .
i could have created all sorts of other ideas – directories , photos , credentials and licenses – but really it all boiled down to what is a great predicator of having a successful outcome ? in hiring a contractor , you really want to know how they ' ve conducted themselves with past clients . it ' s sort of like a job interview . your past success will be a great predictor of your future success .
sure , no one is a perfect 10 . we tell this to companies all the time . they might have some bad clients along the way or miscommunication or maybe one of their employees did a bad job . but ultimately , if they make it right and are a good company doing great work time and time again , that ' s who people want to find and hire .
your advertisers are the same people being critiqued . what are your rules around that ?
companies can advertise , whether they have reviews or not . i look at advertising and reviews like church and state ; like movie advertising in newspapers . movies can advertise but it can ' t affect their rating .
we read everything before it goes up so we ' re actually not automating that process . we were the first to flag reviews four years ago , even before yelp , so if a review is taken down for any reason , we put up a marker for that user . it may be because it ' s being investigated or because a home owner asks us to take it down .
i took a call from a homeowner this morning who said the contractor had threatened them over a negative review so we took it down . the review is then marked , ' removed by homeowner ' . that ' s a strong signal if the review is removed by the homeowner .
i ' d say 99 per cent of reviews removed by homeowners are because they ' re afraid for some reason or been harassed or bribed to take down their review . sometimes it ' s a positive review but they still want it removed because they ' re not happy with the company anymore .
sometimes a company says they don ' t recognize the work – for example , they ' ll say they ' ve never done work in aurora – but if we get back proof that the homeowner hired this company , then the negative review stays up .
it ' s a bit of a black box only because companies want to game . therefore none of us will communicate how we moderate but we look at the technical things that come in that we can check . then there ' s the actual moderated experience on the company . if they ' ve been gaming before , we do certain things based on the situation . we have a pretty button - down process but things can slip through the cracks . we also have whistle blowers . a company contacted us last week about suspicious activity on a competitor ' s page that we had missed , so we investigated .
how a company is ranked by reviewers can really affect how they ' re seen on the site – the more good things your customers say about a company , the higher they rank . contested reviews are immediately removed and fact checked . if something isn ' t legitimate , we ' ve done measures such as remove our ' best of awards ' rating or disqualified them from ' best of awards ' .
you wouldn ' t believe how angry companies get at us . we walk a fine edge . we ' re loved and hated . at the end of the day , we know we ' re doing the right thing if companies hate us . we ' re living up to doing what we ' re trying to do which is to be the most trusted source .
we just started by building a really good body of reviews in toronto . the first thing i did was go to a home show to find homeowners planning to work on their homes . that was a great move . we still participate at home shows across canada .
the other was finding individuals who are committed . my cto has been with me from the beginning . having pivotal people work with you can absolutely make or break a company .
we worked remotely for the longest time but now we have an office . we take a hybrid approach where we work both remotely and centrally . past 50 people , you need to have more of a core central space . rent is a big expense but it can also accelerate your growth if you bring people together . when you ' re starting a company , you really have to pick and choose what you ' re investing in .
we all use skype as a virtual water cooler for daily questions and funny stories going on across the country . then every month we have virtual calls we ' ve named
the heartbeat
. it ' s just a nice way of getting everybody up to date on all activities in the organization , past successes and what our objectives are for the month . we usually have about 25 per cent of the people in the office and the rest just patching in . it ' s a presentation so we use gotomeeting and google + . then we publish the video on google + private community .
for the annual meeting , we book a resort in ontario to bring every single person together offsite for three days . we ' ve done it for four years now . it ' s fantastic for our culture . we sit around the campfire and have fun olympics with people on different teams so they get to know each other .
the constant challenge is building that flywheel of relevant good content in every market . we ' re locally based so we have the constraint that , for example , you have to live in toronto and have hired somebody in toronto in order to write a review . you can ' t write a review on a company you ' ve never hired . other review sites allow that but what good is that ? it ' s irrelevant .
you can just use a translator . it requires dedicated new resources so we haven ' t crossed that bridge .
when we first first launched , we scaled so we could build in the u . s . , but realized it would have required tens of millions of dollars in venture funding , so we took a different track . we ' re focused on canada .
really define what you ' re trying to accomplish . we ' ve stuck true to our mission of helping homeowners since the very beginning . also , the ' hows ' and ' whats ' can be figured out , but answering your ' why ' will not only help shape what gets you up in the morning but why other people will want to work with you .
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welcome to the globe and mail’s comment community . this is a space where subscribers can engage with each other and globe staff .
we aim to create a safe and valuable space for discussion and debate . that means :
due to technical reasons , we have temporarily removed commenting from our articles . we hope to have this fixed soon . thank you for your patience . if you are looking to give feedback on our new site , please send it along to feedback @ urltoken . if you want to write a letter to the editor , please forward to letters @ urltoken .
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information is the one tool that ' s essential for any job around the house . and while content about home ownership , renovation and maintenance is now widely available on all media , it ' s not always easy to identify reliable sources of unbiased , well - researched material . here are a few examples of books , magazines , and websites that offer up the best tool of all – good information .
the king of canadian contractors , mike holmes , believes that homeowners must educate themselves before starting out on any home project . to help with the process , he has released a new book , make it right : inside home renovation with canada ' s most trusted contractor , which is an a - to - z primer for home renovation projects .
the book includes advice on how to identify a good contractor , and direction on how to handle such issues as permits , deposits , contracts and material changes .
there are specific chapters on bathroom , kitchen and basement renovations as well as detailed sidebars with holmes ' take on features such as bump - outs , in - house sprinklers and ventilation . each of these chapters also provides a list of the top - 10 project - related issues holmes thinks homeowners need to know about .
there ' s also a useful glossary of building terms and products . with a list price of $ 33 , holmes ' book is an excellent resource for anyone buying a new house or renovating their existing home . for more information , go to the website www . holmesonhomes . com .
if you ' re in a bookstore looking for holmes ' book , stop by the magazine section and check out a copy of canadian home workshop . i ' ve just started picking up this publication , and have found it a great source of information on new products , fix - it techniques and design ideas – despite the fact that i ' m not a woodworker . i ' ve also become a frequent reader of the
ask a pro
forum on the magazine ' s website , where readers can post queries and get advice on everything from how to dry cherrywood to how to remove stucco from a ceiling . to check it out , go to urltoken and click on ask a pro .
reviews can include information on everything from a company ' s pricing , delivery to work habits and follow - up . to keep it fair , reviews are vetted , and the companies cited are invited to respond . launched just a year ago , the site already has about 14 , 000 listings of companies in the greater toronto area and about 6 , 000 in vancouver . there ' s no charge to use peterson ' s site .
and if you ' re looking for further proof that good information doesn ' t have to be pricey , visit the canada mortgage and housing site ( www . cmhc . ca ) , which is probably the most underutilized source of home - related information for canadian consumers .
cmhc covers a variety of topics related to home ownership , including buying a home , getting your home ready to sell and securing a mortgage . there are also step - by - step guides to renovating a home , creating barrier - free housing and using environmentally friendly building materials and processes . cmhc has also launched a series of online maintenance videos that cover such topics as roofing care , cleaning mould and adapting homes for seniors .
not all information on the cmhc site is free , but the average homeowner can find a wealth of material without having to spend a penny .
the website of the canadian home builders ' association is also a good source of information about all aspects of home building and renovation , and it can be accessed at www . chba . ca .
comprehensive information on sustainable building materials is especially hard to come by . however , there are two sites i ' ve found offering lists of companies that supply products and services to environmentally friendly building initiatives , and they are a good place to start .
one site is related to the sustainable condo project , built in collaboration with cmhc and the ecosmart foundation ( www . sbtc . ca ) and on view last fall in toronto as part of the green building festival . this educational display is designed to promote sustainable building design , products , technologies and systems . you can find a list of the companies that participated in it by going to www . sustainablecondo . com .
if green building sources are what you ' re after , you may also be interested in the all terrain cabin , a design project created by bark , a not - for - profit design collective based in vancouver . the atc was recently on display in toronto at the metro home show .
using a shipping container as a base structure , bark created a prototype for a sustainable cabin - like structure that would fit a family of four . it ' s still an exercise in design and not a product you can purchase , but it ' s a great showcase of homegrown environmentally - friendly products and services . the list of companies that provided materials or products for the all terrain cabin is available on the collective ' s site www . barkbark . ca .
is a toronto - based freelance writer whose work also appears on www . lovemyplace . com . write to her at vicky @ lovemyplace . com .
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after wading into the unknown for her own home renovations , nancy peterson launched a website where previous customers can post reviews - good or bad - about contractors , painters , plumbers , cleaners , etc .
nancy peterson wanted to give her 60 - year - old house a facelift — a new kitchen , an updated master bathroom , new windows and refinished hardwood floors .
there was just one problem . she didn ' t know any reputable contractors . “it was pretty daunting , ” she says .
realizing other homeowners faced the same situation , peterson decided to do some problem - solving . in 2006 , she launched
jump ahead four years . the site has 250 , 000 companies listed on it from across canada , including 50 , 000 in toronto . now , if you want to hire an electrician , you ' re no longer in the dark about finding someone other people liked . “homeowners are more empowered , ” peterson says .
there is no charge for homeowners to read or post reviews on the site , or for companies to be listed . companies can pay to upgrade to a premium listing , which includes photos , additional information and an ad on competitors ' pages . however , a premium listing does not guarantee a better ranking . companies with the most and best reviews rank the highest .
prior to launching the website , peterson held senior marketing positions at major corporations , including kraft foods and procter & gamble .
“it was hard to leave a good paying job and start a company where you are not going to make a salary for a long time , ” she says . but peterson believed in her idea — a sort of tripadvisor site for home renovations .
the site broke even in 2008 . since then , profits have been reinvested in the company to fund growth — building new markets and adding new staff . there are now 13 employees , compared to four at the beginning .
urltoken from its previous owner . “it wasn ' t a $ 49 buy . ”
there was also a staff transition . peterson realized the team that built the website focused on toronto didn ' t have the tools to build a scalable website , one that could easily add reviews about contractors from other cities .
in mid - 2007 , she let the original team go . “it was a very hard decision to make , ” she says .
a new team built a scalable site , which was ready for initial release in late 2007 .
the original plan was to launch the new site in canada and , at the same time , launch a site in boston . but that was too much to bite off at once .
the site not only benefits homeowners , it ' s also a useful tool for contractors — although they didn ' t all see it that way at first . in the early stages , some worried a negative review would drive away business .
that ' s a lot of homeowners grateful they could read reviews . and that ' s a lot of companies who will benefit from those reviews .
to think , it all started because peterson wanted a new kitchen . now , that ' s a renovation that has paid off .
a i realized the most fun was taking something that wasn’t doing so well but had potential and growing it . i had gone through a renovation and finding the right contractors was a daunting process . it blew me away that the companies i worked for spent hundreds of thousands of dollars on market research but there was nothing in the home improvement field for homeowners — a $ 40 - billion industry . at the time tripadvisor was in its nascent stage and seeing those reviews was my aha moment .
a right after closing that round of financing , i launched in both toronto and boston because all the vcs filled my head with the fact i had to go to the u . s . i kept hearing ‘we don’t want to fund a canadian - only company’ from the vcs . that’s still true today . we weren’t ready for boston . to launch in two centres when your content is very local requires a lot of resources . we hired a community manager in toronto who was able to get 1 , 000 reviews pretty quickly for us but we didn’t have the sales infrastructure set up to convert those to sales , which is difficult because it takes time for reviews to do anything for a company’s business .
a we’ve had to raise money about every two years . we’re in a position now where we can self - fund but that’s taken nine years . you can scale a lot faster if you’re venture backed .
bringing in key individuals during growth stages is important . i’ve had to make some difficult decisions in the past three years about senior people who’ve been with me when i realized they weren’t the right leaders to help us grow fast . one of two key people i’ve brought on is our head of engineering , who is focused on agile development . my first cto was phenomenal in the early days , but wasn’t able to scale the engineering team and get his hands off the keyboard . another person who has made a dramatic difference is our cfo . we had a pretty good grounding on churn and its economics , but until we brought on these two key people we didn’t think of ourselves as a software company . they’ve helped us get into that mindset .
a it’s fundamental to having a great business . the foundation of our culture is trust . our no . 1 stakeholder is the homeowner . everyone has to be aligned to that . if our sales team doesn’t feel a company is a good , ethical company , we don’t want their ads .
a we are focused on being the most trusted source for home - service contractors in canada .
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greyhound canada to end service in prairies , b . c . , eliminating 415 jobs — and leaving small towns in the lurch
american steaks , german cars emerge as early victims in u . s . - china trade war
cannabis grower tilray valued at up to us $ 1 . 5 billion for nasdaq ipo
all rights reserved . unauthorized distribution , transmission or republication strictly prohibited . powered by
negative feedback : online review sites should push businesses to improve their facilities . some have decided paying for fake reviews is an easier way to go about things
this might sound a theatre critic ' s dream , but craigslist ' s
get $ 5 for yelp review
leaves less room for such notions .
it ' s the seamy side of an online reviews industry which has enticed clickfarms in bangladesh , lawyers in london , and new york ' s attorney general .
and now , the uk ' s competitions and market authority ( cma ) as well , which is opening an investigation using its consumer enforcement powers , and pondering further action .
the cma is also planning an international project on online reviews and endorsements , to coincide with britain ' s year - long presidency of the international consumer protection and enforcement network , which starts 1st july .
it ' s big business , these new crowdsourced yellow pages of the internet . a hearty 62 % of british consumers say they are likely to be affected by positive online reviews - with negative ones , that soars to 89 % .
once upon a time , we kept our stiff upper lips , and we kept online opinions stoically to ourselves .
then along popped amazon and ebay in 1994 and 1995 , and with them our habit of scrawling online our joy or chagrin with each latest acquisition .
we now measure ourselves and businesses against an economy of likes , follows , and stars .
one in sixteen of the people online across the world visited tripadvisor last july . the website gains 139 reviews each minute .
trustpilot ' s partnership with google means it provides many of the ratings provided with the search engine ' s results .
and yelp ' s 77 million reviews pulled in 142 million visitors in the first three months of 2015 .
restaurants which increase their ranking on the platform by one star raise revenue by 5 - 9 % , according to harvard business school assistant professor michael luca .
negative reviews are the most useful because they continue to challenge our methods , and teach us more about what our customers want ,
says charlo carabott , managing director of mazuma mobile , a watford mobile phone recycling company .
he says his company engaged with an early spate of negative reviewers , publicly answering their complaints , and now boasts a 9 . 8 out of 10 trustscore on trustpilot , with 100 , 000 reviews .
but for every business like mr carabott ' s , there ' s another with a more negative reaction . some will even turn around and sue their critic . others pen fake reviews , then slate their competition .
london - based pimlico plumbers sued yelp in 2014 for
defamatory and disgusting
reviews .
they were ultimately taken down as part of a settlement , says vince sollitto , yelp ' s senior vice president .
he says anonymous speech is better protected in america than in england and wales , where websites can be required to hand over a reviewer ' s identity under the defamation act of 2013 .
and new york attorney general eric schneiderman announced in september 2013 that 19 companies had agreed to cease posting fake reviews and pay penalties from $ 2 , 500 to $ 100 , 000 ( £1 , 600 - £64 , 000 , €2 , 225 - 88 , 990 ) .
the companies ranged from a dentist , a cosmetic surgery , an adult entertainment chain , and the charter - coach giant us coachways .
it would seem 10 - 30 % of online reviews are fake , based on what i ' ve seen ,
said a veteran of this investigation in the new york attorney general ' s office , who did not wish to be named .
the typical business leaving fake positive reviews - known as boosting - has either few reviews or a recent crop of negative reviews . companies also write fake negative reviews - vandalising - attacking the competition .
at the moment , we will have around 3 % of the reviews that are flagged , that ' s either proactively by users or by ourselves ,
says trustpilot ' s james westlake . by context , he adds , the website has one new review every five seconds .
the reason is quite simple . when was the last time you checked a review of burger king or mcdonald ' s ? nobody does that ,
says dr georgios zervas , assistant professor at boston university , who studies internet markets .
he says the number of reviews rejected as suspicious by yelp , 16 % , at present , has increased yearly .
there are several telltale signs of fake reviews . they are often shorter , and more extreme , clustered at either end of the scale .
too many reviews , or from the same ip address , at the same time is another sign , says jenny sussin , an analyst with technology research firm gartner .
tripadvisor uses
approximately 50 filters
, applied by automated systems , says adam medros , who heads its product development .
you have interconnectedness of attributes between people , devices , and locations that aren ' t normal , and they stand out against backdrop of normal behaviour ,
he says .
firms suspected of doctoring reviews receive a scarlet letter , a red badge alerting readers that reviews submitted for that business have raised suspicions .
it ' s a cat and mouse game , says mr medros , which he confesses he finds geekily intriguing .
there ' s always going to be an arms race , a little bit , around the tech different people are using , and the ways we use to detect them ,
he says .
they ' re getting better , we ' re seeing this in past years ,
says trustpilot ' s mr westlake .
we identify fraudulent activity and it morphs , like a cold virus .
many scammers are recent computer science graduates from developing countries such as bangladesh , india , and the philippines .
in the short term , it is easy for them to fake an ip address , but harder to manage this at scale without tripping alarms .
websites like yelp have also engaged in more cloak - and - dagger ways to tease out illicit behaviour , posing as scammers , or businesses searching to hire them .
if those caught cooperate , it is another source of intelligence into the other side ' s dark arts .
it turned out we were able to get people to admit they were fake ,
says the specialist from the new york attorney general ' s office .
it was a combination of people coming clean , and the occasional email providing enough of a gotcha ,
he says .
part of the reason , suggests yelp ' s mr sollitto , could be local small businesses are the last part of the business world to be brought online .
most still spend nearly all their advertising budget in traditional ways , even as studies show consumers searching for and finding them online .
partly , they get to control the message , the copy , the one - way advertising , even though the reality is that no longer works ,
he says .
it will take some time for the small business market to come to accept
all these old - fashioned methods are worthless
.
what really matters is online , and online you can ' t control a message . you can only earn a reputation .
the foreign secretary quits , telling theresa may
needless self - doubt
is leading to
semi - brexit
.
karim hajee , father of four , wanted to turn his two - bedroom bungalow into a five - bedroom dream home . like dozens of others , he entrusted his big renovation to adam gardin .
karim hajee stands in front of the big hole in the ground left behind after major renovations on his bungalow were halted . hajee is one of a group of people who say they have been left in the lurch after a builder , garcon building group , ran into financial difficulty .
karim hajee stands inside his gutted home after major renovations on his bungalow were halted . hajee is one of a group of people who say they have been left in the lurch after a builder , garcon building group , ran into financial difficulty .
hajee said gardin’s 10 - year - old company , garcon building group , gutted his north york house in october , dug the hole in november , and abandoned the site in the middle of december .


cohmad securities was a us company whose main business was to introduce investors to the bernard madoff investment company for which it received commission based on the amount invested .

the company , whose name combines “ cohn ” and “ madoff , ” was founded in 1985 by bernard madoff and maurice cohn , madoff ’s friend and former neighbor .

its office was located at the same address as madoff 's firm , and it employed between 10 and 20 employees with annual sales between $ 1m and $ 5m .

cohmad securities

picard v . cohmad securities corp . 09 - ap - 1305 , june 22 , 2009
sec v . cohmad securities corp . , 09 civ . 5680 , june 22 , 2009
picard v . cohmad securities corp . 09 - ap - 1305 , june 22 , 2009
sec v . cohmad securities corp . , 09 civ . 5680 , june 22 , 2009
cohmad , sonny and marcia cohn , and former cohmad vice president robert jaffe in 2010 settled a related u . s . securities and exchange commission probe into their dealings with madoff .
the u . s . securities and exchange commission and the trustee last week sued cohmad securities , a brokerage founded by bernard madoff and long - time associate maurice cohn . also sued were cohn’s daughter , marcia , and robert jaffe , both cohmad executives .
though cohmad is insolvent , picard said he plans to keep pursuing claims against six other individuals who received “substantial fees” for helping cohmad raise money for madoff .
cohmad received $ 67 million in generated fees from madoff investments , from 2000–2008 .
madoff trustee reaches recovery agreement of approximately $ 32 million with cohmad securities corporation , the estate of maurice “sonny” cohn , marcia b . cohn & marilyn cohn
on march 15 , 2009 , federal prosecutors filed a notice in federal court declaring its intent to seek the forfeiture of the madoffs ' interests in cohmad securities .
sipc - madoff trustee reaches recovery agreement of approximately $ 32 million with cohmad securities corporation , the estate of maurice “sonny” cohn , marcia b . cohn & marilyn cohn
irving picard , the trustee liquidating bernard l . madoff investment securities llc , on friday announced the settlement with the estate of former cohmad chairman maurice “sonny” cohn , his widow marilyn cohn , and their daughter marcia cohn , who was cohmad’s chief operating officer .
in re bernard l . madoff investment securities llc , debtor . irving h . picard , as trustee for the liquidation of bernard l . madoff investment securities llc , plaintiff , v . cohmad securities corporation , etc . , and the joint tenancies of phyllis guenzburger and fabian guenzburger and robert pinchou and fabian guenzburger , defendants .
cohmad received $ 67 million in generated fees from madoff investments , from 2000 - 2008 .
jaffe has filed requests with the courts to dismiss the sec and the picard cases . the cases are picard v . cohmad securities corp . , 09 - ap - 1305 ,
law360 ( may 8 , 2009 , 12 : 00 am edt ) - - massachusetts ' top securities enforcement office has revoked the license of madoff feeder firm cohmad securities corp . and ordered it to pay a $ 100 , 000 fine for allegedly refusing to cooperate with an investigation of the fund ' s relation to the ponzi scheme , in violation of state securities law .
“cohmad is one of the earliest and best - known names affiliated with madoff , and this highly successful settlement brings one important chapter of the cohmad securities corporation story to a close , ” said bakerhostetler co - lead attorney kathryn m . zunno . “we negotiated and reached this agreement despite the fact that cohmad has been insolvent and non - operational , and a key principal ( sonny cohn ) is now deceased . we look forward to further resolution as we pursue the ongoing cohmad - related litigation . ”
the cases are picard v cohmad securities corp et al , u . s . bankruptcy court , southern district of new york , no . 09 - ap - 01305 ; and in re : bernard l . madoff investment securities llc in the same court , no . 08 - 01789 .
new york , new york and washington , dc - november 4 , 2016 - irving h . picard , securities investor protection act ( sipa ) trustee for the liquidation of bernard l . madoff investment securities llc ( blmis ) , filed a motion today in the united states bankruptcy court for the southern district of new york , seeking approval of a settlement agreement with cohmad securities corporation ( “cohmad” ) , the estate of maurice “sonny” cohn , marcia b . cohn and marilyn cohn ( the “cohmad parties” ) . an approval hearing has been set for november 30 , 2016 at 10 a . m .
in re bernard l . madoff investment securities llc , 418 b . r . 75 – urltoken
the sipa trustee will continue to pursue his claims against the remaining defendants in picard v . cohmad et al , including certain cohmad registered representatives who received substantial fees for referring investors in the ponzi scheme . under the agreement , the cohmad parties agree to cooperate with future discovery requests from the sipa trustee and make themselves available for depositions and any trials that may assist in recovering additional funds related to cohmad for the sipa trustee’s ongoing recovery efforts .
the brokerage firm lists its address as madoff ' s firm ' s address in new york city . cohmad employs
the sec previously charged madoff and bernard l . madoff investment securities llc ( bmis ) as well as their auditors with committing securities fraud through a ponzi scheme perpetrated on advisory and brokerage customers of bmis .
the notice follows mr . madoff’s guilty plea last week in the biggest securities fraud scheme in corporate history .
new york ( reuters ) - victims of bernard madoff’s ponzi scheme will receive another $ 32 . 1 million under a new settlement over the swindler’s ties to cohmad securities corp , whose clients invested more than $ 1 billion with him .
secretary of the commonwealth of massachusetts william f . galvin announced the decision from the massachusetts securities division on thursday .
jaffe is a massachusetts registered representative of , and an owner of , defendant cohmad securities corporation ( cohmad ) , a massachusetts registered broker - dealer . because of jaffe ' s reported close personal and professional ties to madoff , the secretary believes that jaffe may have
significant information material to his investigation into mr . madoff .
id . , para . 5 .
seeking to revoke the massachusetts license of cohmad securities corp . , an accounting of all massachusetts investors cohmad referred to madoff’s company , all the fees it earned doing so ( more than $ 67 million ) , and a fine . it named ruth madoff as having withdrawn $ 10 million on december 10 , 2008 and $ 5 . 5 million on november 25 , 2008 from her brokerage account . it also cited $ 526 , 000 in referral fees paid from madoff investments , to cohmad , to vienna
[ 1 ] jaffe has not contested that he is registered as an agent with the securities division , and that the subpoena , and this action , arise out of his transaction of business in massachusetts relating to the sale of securities .
listed in the two - page notice are the madoffs’ homes in manhattan , montauk , n . y . , palm beach , fla . and the antibes in france . prosecutors are also seeking their interests in cohmad securities , a securities firm under investigation by the state of massachusetts , and a wachovia bank account in ruth madoff’s name holding more than $ 17 million .
cohmad had fewer than 650 client accounts , and made 99 . 7 % of its sales from brokerage services to madoff ' s larger broker - dealer . in its audited financial statements for the 12 months ending june 30 , 2008 , cohmad said revenue from madoff securities totaled $ 3 , 736 , 829 . its total sales for the same period were $ 3 , 748 , 397 .
the subpoena is signed in the name of the secretary by the associate director & general counsel of the massachusetts securities division .
jaffe has filed requests with the courts to dismiss the sec and the picard cases . the cases are picard v . cohmad securities corp . , 09 - ap - 1305 , u . s . bankruptcy court , southern district of new york ( manhattan ) , and sec v . cohmad , 09 - cv - 5680 , u . s . district court , southern district of new york . ) .
the lawsuit claims that up to 90 percent of cohmad’s income came from referring clients and that the firm had a “symbiotic” relationship with madoff , having earned hundreds of millions of dollars from the fraud . the lawsuit seeks more than $ 100 million paid to cohmad six years prior to madoff’s firm declaring bankruptcy , and more than $ 105 million in profits cohmad employees and their families withdrew from the investment accounts they held with madoff .
richard spring , of boca raton , florida , received payments from cohmad for many years in exchange for bringing investors and investment ideas to madoff .
securities investor protection corporation 1667 k st . n . w . , suite 1000 washington , d . c . 20006 - 1620
on may 8 , 2009 , the commonwealth of massachusetts found the firm to be in “default” for not assisting regulators . cohmad’s securities registration has been revoked , and they must provide an accounting of all fees the company or its agents earned for referring massachusetts investors to mr . madoff ' s firm as well as , pay a $ 100 , 000 fine for failing to cooperate with the state securities investigation .
seeking to revoke the massachusetts license of cohmad securities corp . , an accounting of all massachusetts investors cohmad referred to madoff’s company , all the fees it earned doing so ( more than $ 67 million ) , and a fine . it named ruth madoff as having withdrawn $ 10 million on december 10 , 2008 and $ 5 . 5 million on november 25 , 2008 from her brokerage account . it also cited $ 526 , 000 in referral fees paid from madoff investments , to cohmad , to vienna bank medici majority owner , sonja kohn , which she subsequently denied .
the sec ' s complaint also alleges that the compensation arrangement between bmis and cohmad indicated fraudulent conduct at bmis . cohmad was paid an annual percentage of the funds its representatives ( except jaffe ) brought into bmis offset by any withdrawals from those investor accounts . this compensation arrangement indicated to cohmad and the cohns that bmis was not providing any real returns to investors . for example , where the client ' s principal investment had been $ 10 , 000 , cohmad stopped receiving fees if a client withdrew $ 15 , 000 from an account , even if under bmis ' management the account had purportedly grown to $ 100 , 000 . in cohmad ' s internal records , such an account was designated with a negative $ 5 , 000 number .
posted by phillip crawford jr . at 01 : 30 pm in bernard madoff , cohmad securities corp . , colombian drug cartels , gennaro angiulo , m / a / s capital corp . , patriarca , robert m . jaffe , russian mafia , the mafia & other organized crime news
h . picard , trustee for the substantively consolidated sipa liquidation of bernard l . madoff investment securities llc and bernard l . madoff .
the sec ' s complaint against the cohmad defendants alleges that while bringing investors to madoff , they ignored and even participated in many suspicious practices that clearly indicated madoff was engaged in fraud . for example , the sec ' s complaint alleges that the cohns and cohmad filed false forms bd and focus reports that concealed cohmad ' s primary business of bringing in investors for bmis . this referral business comprised as much as 90 percent of cohmad ' s revenue in some years , brought in more than 800 accounts , and billions of dollars into bmis ' advisory business , for which bmis paid them more than $ 100 million .
the brokerage firm lists its address as madoff ' s firm ' s address in new york city . cohmad employs robert jaffe , as vice - president .
posted by phillip crawford jr . at 12 : 19 am in bernard madoff , cohmad securities corp . , donato angiulo , francesco angiulo , gennaro angiulo , m / a / s capital corp . , michele angiulo , patriarca , robert m . jaffe , the mafia & other organized crime news
both sec ' s complaints seek injunctions , financial penalties and court orders requiring cohmad , the cohns , jaffe and chais to disgorge their ill - gotten gains .
the order directed cohmad to pay a $ 100 , 000 administrative fine to the state , revoked the fund ' s registration and ordered it to . . .
washington , d . c . , june 22 , 2009 — the securities and exchange commission today charged a new york - based broker - dealer and four individuals with securities fraud , alleging that they collectively raised billions of dollars from investors for bernard l . madoff ' s ponzi scheme .
( manhattan ) , and sec v . cohmad , 09 - cv - 5680 , u . s . district court , southern district of new york . ) .
posted by phillip crawford jr . at 04 : 31 pm in ariana tadler , bernard madoff , cohmad securities corp . , gennaro angiulo , m / a / s capital corp . , melvyn weiss , milberg llp , milberg weiss bershad & schulman llp , patriarca , robert m . jaffe , seeger weiss , stephen weiss
bakerhostetler co - lead attorney esterina giuliani added , “this settlement is a key step in the overall cohmad - related litigation that is part of the overall liquidation of blmis . we will now focus on pending litigation against remaining cohmad defendants , as our team continues its global efforts to recover money stolen by madoff to return to its rightful owners . ”
maurice
sonny
cohn owned 48 % of cohmad , and his daughter marcia , who served as president and chief compliance officer owned 25 % . madoff owned 15 % . mr . madoff ' s brother , peter owned 9 % , and mr . cohn ' s brother owned 1 % , and another unnamed cohmad employee owned 1 % .
in re bernard l . madoff investment securities llc , 418 b . r . 75 ( bankr . s . d . n . y . 2009 )
the sec acknowledges the assistance of the trustee for the securities investor protection corporation , and california attorney general jerry brown . the sec ' s investigation is continuing .
posted by phillip crawford jr . at 10 : 41 pm in bernard madoff , cohmad securities corp . , donato angiulo , francesco angiulo , gennaro angiulo , m / a / s capital corp . , michele angiulo , mob history , patriarca , raymond l . s . patriarca , robert m . jaffe , the mafia & other organized crime news
on december 17 , 2008 , the secretary issued a subpoena commanding jaffe to appear before the massachusetts securities division on january 6 , 2009 and give sworn testimony
in the matter of : bernard l . madoff investment securities
( subpoena ) . the secretary issued the subpoena in connection with his investigation of madoff , and pursuant to the massachusetts uniform securities act , g . l . c . 110a ( act ) . he caused it to be served on jaffe , apparently by certified or registered mail , return receipt requested , addressed to jaffe at cohmad ' s new york office . the proof of service attached to the complaint bears the signature of
j . larsen
on december 19 , 2008 .
law360 , new york ( november 4 , 2016 , 7 : 12 pm edt ) - - the court - appointed trustee for bernie madoff’s fraudulent investment firm asked a manhattan bankruptcy judge on friday to approve a $ 32 . 1 million clawback settlement with cohmad securities corp . and won approval to dismiss an $ 8 million clawback suit against a former basketball team franchise owner .
, 153 - 54 ( 2d cir . 1999 ) ( finding long arm jurisdiction for claims arising out of defendant ' s transactions to and from its new york securities account ) .
— бывший председатель совета директоров фондовой биржи nasdaq американский финансист , основатель компании madoff investment securities . бывший председатель совета директоров фондовой биржи nasdaq . в декабре 2008 года был арестован по подозрению в… …
robert m . jaffe , the broker who steered many wealthy boston and palm beach investors to bernard madoff ' s investment fund through both new york - based cohmad securities corp . , partly owned by madoff and of which jaffe is a vice president , and jaffe ' s own palm beach - based m / a / s capital corp . , previously did business with gennaro angiulo and his brothers :
robert m . jaffe , the broker who steered many wealthy investors to bernard madoff ' s investment fund through both new york - based cohmad securities corp . , partly owned by madoff and of which jaffe is a vice president , and jaffe ' s own palm beach - based m / a / s capital corp . , previously
did business with another notorious rogue : former boston mob leader gennaro angiulo
:
maurice
sonny
cohn owned 48 % of cohmad , and his daughter marcia , who served as president and chief compliance officer owned 25 % . madoff owned 15 % . mr . madoff ' s brother , peter owned 9 % , and mr . cohn ' s brother owned 1 % , and another unnamed cohmad employee owned 1 % . cohmad received $ 67 million in generated fees from madoff investments , from 2000–2008 . the brokerage firm lists its address as madoff ' s firm ' s address in new york city . cohmad employs robert jaffe , as vice - president . jaffe is married to ellen shapiro , daughter of boston philanthropist carl j . shapiro , the founder and former chairman of apparel company kay windsor inc . and an early investor and close friend of madoff . jaffe reportedly convinced the elder shapiro to invest $ 250 million with madoff just 10 days before madoff ' s arrest .
here , jaffe ' s contacts with massachusetts consist of his registration in massachusetts as a representative of cohmad securities corporation , a massachusetts broker - dealer , and his dealings with massachusetts investors on behalf of madoff . the secretary ' s action indisputably arises out of jaffe ' s contacts in massachusetts , where the secretary seeks to obtain information from jaffe related to his involvement with cohmad , an entity in which madoff has an ownership interest , and to his direct involvement in sales by madoff of securities to massachusetts investors . there is nothing before the court that would indicate that the assertion of jurisdiction over jaffe is unduly burdensome or otherwise unfair in light of the significant interests at stake . [ 5 ] the only remaining issue , therefore , centers on whether jaffe ' s contact with massachusetts is sufficient to satisfy the requirement of minimum contacts . the court concludes that it is .
robert m . jaffe , the broker who steered many wealthy boston and palm beach investors to bernard madoff ' s investment fund through both new york - based cohmad securities corp . , partly owned by madoff and of which jaffe is a vice president , and jaffe ' s own palm beach - based m / a / s capital corp . , previously
did business with another notorious rogue : former boston mob leader gennaro angiulo
:
the complaint , filed on june 22 , 2009 , proceeds against cohmad securities corporation (
cohmad
) and various affiliated individuals and entities , seeking turnover and accounting , avoidance of preferential and fraudulent transfers , and damages pursuant to sections 542 , 544 , 547 ( b ) , 548 ( a ) ( 1 ) ( a ) and ( b ) , 550 and 551 of the bankruptcy code and sections 276 , 276 - a , 278 and / or 279 of the new york debtor and creditor law . the complaint alleges , inter alia , that cohmad , a new york corporation founded in 1985 by madoff and friend sonny cohn , participated in the fraudulent scheme by recruiting clients for , and diverting billions of dollars to , blmis . collectively , the named defendants are alleged to have profited in the amount of several hundred million dollars at the expense of the defrauded victims of the blmis ponzi scheme .
jaffe ' s brokerage relationship with the angiulos first came to light
in an inquiry by federal securities regulators into whether cowen failed to report large deposits the angiulos made into their brokerage accounts there
that
was part of a broader federal investigation of alleged money laundering by the angiulos
; however ,
neither jaffe nor cowen was ever implicated , and the securities and exchange commission inquiry appears to have ended quietly .
bernard l . madoff investment securities llc had about 200 employees in a brokerage unit and an investment advisory business . the court - appointed trustee winding down the firm said the criminal activity took place in the investment arm .
for the reasons stated above , the secretary ' s application for an order enforcing the administrative subpoena issued to defendant robert m . jaffe is granted . it is therefore ordered that defendant robert m . jaffe shall comply with the subpoena by appearing at the offices of the securities division of the secretary to give testimony under oath in the matter of bernard l . madoff investment securities on a date to be agreed to by the parties , but not later than february 6 , 2009 .
“cohmad is one of the earliest and best - known names affiliated with madoff , and this highly successful settlement brings one important chapter of ( its ) story to a close , ” kathryn zunno , a partner at picard’s law firm baker & hostetler , said in a statement .
thus , under paragraph 6 ,
for the purpose of complying with the laws [ of massachusetts ] relating to sale of securities
– e . g . , c . 110a , § 407 – jaffe has appointed the secretary his attorney for service of process in
any action or proceeding against me . . . in connection with
the sale of securities or an alleged violation of the act . even if the secretary ' s investigation of madoff ' s sales of securities and alleged violations of the act is not an
action or proceeding
against jaffe , this lawsuit is , because it is brought directly against jaffe under c . 110a , § 407 ( c ) to enforce a subpoena issued
in connection with
that investigation .
filed a claim against cohmad , founder maurice “sonny” cohn , daughter marcia cohn , robert jaffe , richard spring , alvin j . delaire , jr . , stanley mervin berman , jonathan greenberg , cyril jalon , morton kurzrok , and rosalie buccellato , among more than two dozen individuals and trusts in
trustee irving picard urged u . s . bankruptcy judge stuart m . bernstein to approve the $ 32 . 1 million deal with investment firm cohmad , the estate of its deceased founder and his surviving family . picard accused the firm of funneling huge sums into madoff ' s defunct brokerage , . . .
the sec ' s complaint against the cohmad defendants specifically alleges that cohmad violated section 17 ( a ) of the securities act of 1933 , sections 10 ( b ) , 15 ( b ) ( 1 ) , 15 ( b ) ( 7 ) , and 17 ( a ) of the securities exchange act of 1934 and rules 10b - 5 , 15b3 - 1 , 15b7 - 1 and 17a - 3 thereunder and aided and abetted violations of sections 206 ( 1 ) , 206 ( 2 ) and 206 ( 4 ) of the investment advisers act of 1940 and rule 206 ( 4 ) - 3 thereunder ; that the cohns violated section 17 ( a ) of the securities act , and section 10 ( b ) of the exchange act and rule 10b - 5 thereunder and aided and abetted violations of sections 10 ( b ) , 15 ( b ) ( 1 ) , 15 ( b ) ( 7 ) , and 17 ( a ) of the exchange act and rules 10b - 5 , 15b3 - 1 , 15b7 - 1 and 17a - 3 thereunder and sections 206 ( 1 ) , 206 ( 2 ) and 206 ( 4 ) of the advisers act and rule 206 ( 4 ) - 3 thereunder ; and that robert jaffe violated section 17 ( a ) of the securities act and section 10 ( b ) of the exchange act and rule 10b - 5 thereunder and aided and abetted violations of sections 10 ( b ) , 15 ( b ) ( 7 ) , and 17 ( a ) of the exchange act and rules 10b - 5 , 15b7 - 1 and 17a - 3 thereunder and sections 206 ( 1 ) , 206 ( 2 ) and 206 ( 4 ) of the advisers act and rule 206 ( 4 ) - 3 thereunder .
most of the information on the madoffs’ property was made public on friday by lawyers for mr . madoff . the madoffs’ net worth was valued at more than $ 823 million at the end of 2008 , according to a filing in a civil lawsuit brought by the securities and exchange commission .
the return of service of the summons and order of notice , complaint , and related papers in this case , attached to the secretary ' s memorandum , comprises two affidavits from
certified process servers
for , respectively , palm beach county , florida , ( certifying service at jaffe ' s
usual place of abode
in palm beach , florida ,
to steven jaffe , son
) [ 4 ] ; and new york , new york ( certifying service at cohmad securities corporation , 886 third avenue , 18 th floor , upon marcia cohen , president , as authorized to accept on behalf of the above - named entity .
in a complaint filed in u . s . district court for the southern district of new york , the sec charged cohmad securities corporation as well as its chairman maurice j . cohn , chief operating officer marcia b . cohn , and registered representative robert m . jaffe for actively marketing investment opportunities with madoff while knowingly or recklessly disregarding facts indicating that madoff was operating a fraud . in a separate complaint filed in the same court , the sec charged california - based investment adviser stanley chais , who oversaw three funds that invested all of their assets with madoff . when the ponzi scheme collapsed , chais investors ' accounts were valued at nearly $ 1 billion .
the sec ' s complaint against chais specifically alleges that he violated section 17 ( a ) of the securities act , section 10 ( b ) of the exchange act and rule 10b - 5 thereunder , and section 206 ( 4 ) of the advisers act and rule 206 ( 4 ) - 8 thereunder .
madoff cultivated an air of exclusivity by pretending that he was too successful to trouble himself with marketing to new investors ,
said robert khuzami , director of the sec ' s division of enforcement .
in fact , he needed a constant in - flow of funds to sustain his fraud , and used his secret control of cohmad to obtain them .
harry markopolos , the securities industry executive and fraud investigator who attempted to warn the s . e . c . for years that bernard madoff was involved in a ponzi scheme ,
did not initially disclose his own identity to regulators because he feared for his life , according to testimony he has apparently prepared for a congressional hearing wednesday morning
:
in ruth’s world , the landscape was filled with younger , taller women . “i brought my fiancé to a stany [ securities traders association of new york ] party , and the two of us were talking to ruth , who kept looking over my fiancé’s shoulder at bernie talking to two women , one of whom was a blonde , ” says a guest .
some of the property , such as the boats , is registered in ruth madoff’s name . she has not been charged with a crime and had no formal association with her husband’s business . but some of her actions — notably the withdrawal of $ 15 . 5 million from cohmad days before her husband’s arrest and the mailing of more than $ 1 million of jewelry and watches — have brought harsh scrutiny .
on june 22 , 2009 , madoff trustee , irving picard filed a claim against cohmad , founder maurice “sonny” cohn , daughter marcia cohn , robert jaffe , richard spring , alvin j . delaire , jr . , stanley mervin berman , jonathan greenberg , cyril jalon , morton kurzrok , and rosalie buccellato , among more than two dozen individuals and trusts in u . s . bankruptcy court in new york .
you mention madoff . but , madoff never had a criminal record until now . yes , there were countless indicators ( as ken would say ) that madoff was running a scheme : his inaccessibility ; the lack of transparency ; the conflict of interest with cohmad securities ; the unimpressive 3 - man accounting team in charge of overseeing billions of dollars of investor money ; the 2001 controversial articles that questioned madoff’s rates of return ; and so on . still , these are nuances . we have looked into the backgrounds of several executives and hedge fund managers who have been subject to rumors and , upon further examination , we have found these rumors came from people who felt wronged in some way and attempted to smear the names of perfectly fine business men and women . those rumors were baseless .
it was brilliant . with the most revered jewish philanthropist in palm beach as his surrogate father , and the philanthropist’s glamorous son - in - law as his local feeder , madoff could remain aloof and say no while jaffe—who many insist was duped along with his father - in - law—attracted investors . ( a spokesperson for robert jaffe and carl shapiro says , “both men are victims and had no knowledge of madoff’s fraudulent scheme . ” ) as late as thanksgiving of last year , two weeks before madoff’s arrest , jaffe was reportedly considering new clients in palm beach . while jaffe and other middlemen were pulling in money , however , ruth madoff was withdrawing : $ 5 . 5 million on november 25 from cohmad securities , the investment entity co - owned by madoff , of which jaffe is vice president .
the complaint alleges that each of the joint tenancy defendants maintained an account with blmis in new york and directed transfers to and from these accounts to the detriment of blmis victims . additionally , the guenzburger tenancy allegedly maintained an account with cohmad , and the pinchou tenancy directed defendant sonny cohn , co - founder of cohmad , to maintain its blmis files . neither of the moving defendants has filed a claim in the underlying liquidation . the complaint lists the guenzburger joint tenancy as having an address at amsel strasse 18 , basel 4059 , switzerland , and the pinchou joint tenancy as having an address at dornacherstrasse 16 , 4147 aesch , switzerland . the trustee attempted service by mailing process to the two swiss addresses through regular mail , care of the united states postal service , on june 25 , 2009 . actual receipt of service by this mail method has not been denied .
on valentine’s day 1994 , after four months of dating , levy made what carmen called his “grandstand play” for her affection . he instructed her to meet him at the office of bernard l . madoff investment securities , in the lipstick building , the oval red - granite monolith at 53rd street and third avenue designed by philip johnson and john burgee . “bring your checkbook , ” he said .
on january 14 , the secretary filed this action . the court issued an order of notice for hearing on january 21 at 2 p . m . on january 15 , jaffe was served with the summons , complaint , order of notice , and other papers ( including a copy of the subpoena , attached to the complaint ) at his residence in florida , and at cohmad ' s offices , by process servers for each of those respective states .
there can be no doubt that jaffe ' s registration in massachusetts as an agent of cohmad , a registered massachusetts broker - dealer ( permitting jaffe to
transact business
in the commonwealth , see g . l . c . 110a . §§ 201 and 202 ) , together with his transaction of business in connection with the very matter under investigation by the secretary , satisfies the purposeful availment prong . accordingly , jaffe ' s constitutional argument fails .
pursuant to massachusetts general laws chapter 110a , §407 ( b ) , you are hereby commanded , in the name of the commonwealth of massachusetts to appear personally and give testimony before the massachusetts securities division , office of the secretary of the commonwealth , john w . mccormack building , one ashburton place , room 1701 , boston , massachusetts , 02108 , on january 6 , 2009 at 10 : 00 a . m . this oral examination will continue until completed .
secretary of the commonwealth william galvin ( secretary ) seeks an order , pursuant to g . l . c . 110a , § 407 ( c ) , compelling defendant robert jaffe ( jaffe ) to comply with a subpoena to testify in connection with the secretary ' s investigation of bernard madoff ( madoff ) and madoff investment securities llc ( madoff llc ) . for the reasons stated below , the court will order jaffe to comply with the secretary ' s subpoena .
both sides refer the court to silverman v . berkson , supra , 661 a . 2d 1266 , a case nearly identical to the present case , and considered by one authority
the leading case in the area
of enforcement of out - of - state administrative subpoenas . long , j . , blue sky law , § 11 : 43 ( november 2008 ) . in silverman , the issue was
the authority and power of a new jersey agency investigating securities transactions involving new jersey residents to issue a subpoena to a witness outside of the state ' s boundaries , and the corresponding authority and power of a new jersey court to enforce such a subpoena .
like the act adopted in massachusetts , new jersey ' s version of the uniform securities act contained no provision
‘affording a procedure for the bureau to take out - of - state testimony of a non - resident witness . '
id . at 1268 .
under the terms of the agreement with the cohmad parties , the settlement will immediately benefit the blmis customer fund by approximately $ 32 million . it represents more than 100 percent of the amount transferred by blmis to sonny cohn , marilyn cohn and marcia cohn as withdrawals from their investment advisory accounts during the six - year period prior to the blmis liquidation filing , as well as more than 100 percent of the fees for referrals made to blmis that sonny cohn and marcia cohn received during the six - year period prior to the blmis liquidation filing .
against co - founder maurice
sonny
cohn , president marcia cohn , and robert jaffe . the lawsuit alleges the company was madoff ' s
in - house marketing arm
and critical to madoff ' s scam . cohmad representatives were paid for funds they brought into the firm but not for any putative increase in the investments ' value . withdrawals were treated as a loss , which
suggested that profits generated by madoff were fictitious
, although madoff changed the arrangement in 2002 for maurice cohn , and began paying him $ 2 million a year .
the trustee initiated this adversary proceeding in connection with the infamous ponzi scheme perpetrated by bernard l . madoff through his investment company , blmis . on december 11 , 2008 , madoff was arrested by federal agents and charged with securities fraud in violation of 15 u . s . c . §§ 78j ( b ) , 78ff and 17 c . f . r . § 240 . 10b - 5 in the united states district court for the southern district of new york (
district court
) .
i , the undersigned , for the purpose of complying with the laws of [ massachusetts ] . . . relating to sale of securities . . . , hereby irrevocably appoint the administrator of [ that state ] . . . my attorney in said state [ ] upon whom may be served any notice , process or pleading in any action or proceeding against me arising out of or in connection with the offer or sale of securities . . . or out of the violation or alleged violation of the aforesaid laws of said state [ ] and i do hereby consent that any such action or proceeding against me may be commenced in any court of competent jurisdiction and proper venue within said state [ ] by service of process upon said appointee with the same effect as if i were [ a ] resident in said state [ ] and had lawfully been served with process in said state [ ] . it is requested that a copy of any notice , process or pleading served hereunder be mailed to me at my residence .
on december 15 , 2008 , the securities investor protection corporation (
sipc
) filed an application in the civil action seeking a decree that the customers of blmis are in need of the protections afforded under sipa . the district court granted sipc ' s application and entered an order on december 15 , 2008 , placing blmis ' s customers under the protections of sipa (
protective order
) . the protective order appointed plaintiff as trustee for the liquidation of the business of blmis and removed the sipa liquidation
on january 13 , 2009 , the secretary responded to jaffe ' s counsel by faxed letter :
in response to the information you provided last night indicating that mr . jaffe will be available to testify as of january 19 , 2009 , the massachusetts securities division is rescheduling mr . jaffe ' testimony for wednesday , january 21 , 2009 at 10 : 00 am at the offices of the division . the testimony is pursuant to the initial subpoena served on december 17 , 2008 .
arkin aff . , ex . r .
in addition to ms . zunno and ms . giuliani , messrs . harbeck and picard , and david j . sheehan , chief counsel to the sipa trustee , would like to thank the securities investor protection corporation’s josephine wang and kevin bell , as well as bakerhostetler attorneys oren j . warshavsky , thomas l . long , elizabeth m . schutte , shawn hough , frank m . oliva , kevin m . wallace , samuel m . light , lauren r . weinberg , and brian f . allen , who assisted with the work on this settlement .
this is the second recovery agreement reached in the blmis liquidation in two weeks . on october 28 , a $ 277 million , global settlement was announced in chais , et al , that will bring an immediate benefit of $ 232 million to the customer fund . with these new recovery agreements , the sipa trustee has recovered or has reached agreements to recover more than $ 11 . 491 billion . distributions to blmis customers now total more than $ 9 . 467 billion , which includes $ 836 . 6 million in committed advances from the securities investor protection corporation .
her salespeople at jeffrey messenger a shipment of [ narciso ] rodriguez’s clothes and shoes to her at the beginning of each season and simply charge her for what she doesn’t return . “if i see something i like , i call around , ” explains madoff , a securities lawyer . “i just don’t have time to shop . i get a little bit aggravated when i go into a store because i could be doing so many other things that are so much more productive . and the salespeople are around the clothes all day . they know them much better than i do . ”
as the above discussion demonstrates , jaffe has consented to the jurisdiction of massachusetts , as represented both by the secretary as administrator of the act , and the court , in two ways . he has done so directly , in paragraph 2 of form u - 4 ( at least as to any matters relating to the act , as here ) , and in paragraph 6 , by appointment of the secretary as his agent for service of process in actions or proceedings against him in connection with sales of securities or violations of the act . both have been held sufficient to confer personal jurisdiction .
although milberg llp claims that none of its remaining partners participated in the illegal conduct the question still begged is whether some of them were aware of the scheme and what , if any , steps they took to address the problem . after all , what did they think was happening when the same individuals repeatedly were serving as plaintiffs in dozens of lawsuits ? indeed , in 1995 , congress enacted the private securities litigation reform act specifically for the purpose of curbing the abuses for which milberg weiss and its partners were indicted , and surely this legislation raised a red flag even among the innocents at the firm .
on a cross - country tour to speak with those who weren’t lucky , i felt like the angel of death , knocking on the doors of the once privileged , chosen people who had gained admission into bernie madoff’s amazing investment vehicle , only to be fleeced by him . they all shared the same stacks of now worthless paper ( monthly statements from bernard l . madoff investment securities ) and an overnight obsession with terms such as “feeder funds” ( the myriad individuals and businesses that funneled money to madoff ) and “claw back” ( the government’s threat to make investors return money they’d taken out of madoff’s fund from as far back as six years ) .
when former madoff employees speak of ruth , they invariably bring up the company christmas party at the rosa mexicano restaurant on december 10 , the day before bernie’s arrest . that same day , according to his sons , bernie had confessed his crime to them with ruth standing nearby in their penthouse , but at the party ruth and bernie acted as if nothing were wrong , as if bernard l . madoff investment securities were rock - solid . “ruth was at the party , staring at these people , knowing they were penniless , ” says someone who knows her , adding that ruth reportedly said at the party that she and bernie were going to florida for the holidays .
with regard to the former , the secretary asserts that jaffe is foreclosed from contesting personal jurisdiction in massachusetts because he has consented thereto . it is not disputed that on november 6 , 1989 , jaffe signed a form u - 4 ,
uniform application for securities industry registration or transfer
( form u - 4 ) . see c . 110a , § 202 ; 950 cmr 12 . 202 . jaffe , the applicant , having indicated in item 10 that he was
to be registered with the following : jurisdictions – ma ,
signed the application on page 4 in a box headed
the applicant must read the following very carefully ,
and containing the following pertinent language ( emphasis added ) :
in any event , the lack of a procedure under massachusetts law for service of a subpoena issued under § 407 – whether to a resident in or out of state – should not render such a subpoena invalid , at least if the subject of the subpoena receives actual notice of it and has fair opportunity to object . nor does the fact that neither massachusetts nor florida have adopted the 1985 revision of the uniform securities act ,
containing a procedure for taking of testimony in the state of a nonresident witness for the purpose of an investigation being conducted in another state ,
silverman v . berkson , 141 n . j . 412 , 661 a . 2d 1266 , 1268 ( 1996 ) , lead to a different conclusion . as the court in silverman stated ,
general principles of administrative law suggest that the legislature intended the agency to have the authority necessary to fulfill its function to investigate , within and without the state , securities transactions involving [ that state ' s ] residents .
id . at 1269 . authority to issue a subpoena
within and without
the state implies authority to serve it , even though the procedure for doing so is unspecified . the court need not construct such a procedure in the circumstances of this case , where jaffe clearly received actual notice of the subpoena , had fair opportunity to object to the manner in which it was served , and instead agreed not once but twice to comply .
before this court is the motion (
motion to dismiss
) of the joint tenancy of phyllis guenzburger and fabian guenzburger and the joint tenancy of robert pinchou and fabian guenzburger ( collectively ,
defendants
or
joint tenancy defendants ,
and individually ,
guenzburger tenancy
and
pinchou tenancy ,
respectively ) seeking to dismiss the complaint (
complaint
) of irving h . picard , esq . , (
trustee
or
plaintiff
) trustee for the substantively consolidated securities investor protection act (
sipa
) , 15 u . s . c . § 78aaa et seq . , liquidation of bernard l . madoff investment securities llc (
blmis
) and bernard l . madoff . defendants move to dismiss the complaint for insufficient service of process and lack of personal jurisdiction pursuant to rules 12 ( b ) ( 2 ) , ( 5 ) , ( 6 ) and 12 ( e ) of the federal rules of civil procedure , made applicable herein by rule 7012 of the federal rules of bankruptcy procedure . defendants assert that the complaint should be dismissed because 1 ) the complaint fails to establish personal jurisdiction over the defendants ; and 2 ) service by mail from new york to switzerland was insufficient under rules 4 ( f ) ( 1 ) and 4 ( f ) ( 2 ) ( c ) of the federal rules of civil procedure , made applicable herein by rule 7004 of the federal rules of bankruptcy procedure .
as in this case , the subpoenaed witness in silverman raised constitutional due process objections based on minder . the court stated that
[ t ] he issue in minder was whether a criminal defendant in georgia had received a fair trial when he could not subpoena material defense witnesses who were outside georgia . at that time , georgia law made no provision to subpoena out - of - state witnesses .
by contrast ,
[ t ] he question in this case is not whether a state may compel attendance in the forum of any out - of - state witness , but rather whether it may require the attendance of one who has purposely availed himself of the privilege of entering regulated securities markets in the forum state .
silverman , at 1273 .
jaffe asserts that he has not consented to service of process of investigative subpoenas , relying on that portion of paragraph 6 at page 4 of the u - 4 application which states that he appoints the
administrator
( i . e . , the secretary ) his attorney for service of process in any
action or proceeding against me
arising out of sales of securities . because the secretary ' s investigation is of madoff , not jaffe , jaffe argues that he has not consented to service of the secretary ' s subpoena in furtherance of that investigation . see memorandum in opposition to application to enforce subpoena ( jaffe memorandum ) , at 12 . jaffe further argues that
an investigation does not appear to be either an ‘action ' or ‘proceeding ' even if it were ‘against ' mr . jaffe , which it is not .
id . , n . 7 .
the court is satisfied that the secretary ' s investigation of the alleged madoff scheme under , e . g . , c . 110a , § 101 ( prohibiting fraud in the sale of securities ) and § 102 ( prohibiting fraud in the giving of investment advice ) is conducted pursuant to a legitimate purpose ; that the information which the secretary seeks from jaffe , a close associate of madoff who reportedly
made representations concerning mr . madoff [ to massachusetts investors ] and participated in investing their funds or . . . directed that they invest their funds with mr . madoff ,
complaint , para . 3 , is or may be relevant to that purpose ; [ 1 ] that the information is not already within the secretary ' s possession ; and that the subpoena has not been issued for an improper purpose .
[ 2 ] whether all legally required administrative steps have been followed is addressed below .
‘i want justice ! ” screamed joan sinkin , who , along with her husband , arnold , a retired contractor , had sunk every cent from 55 years of work and the proceeds from the sale of several houses into madoff . after learning that they had lost everything , she was hospitalized with what seemed like a stroke , and her husband collapsed . “i want to be treated like g . m . and a . i . g . and bank of america ! i can’t wait years ! i want s . i . p . c . [ securities investor protection corporation , which insures investors up to $ 500 , 000 ] to put people like us back on our feet ! ” out of her husband’s hearing , she whispered , “we had a good life , and it’s gone . ” the night the news hit , her husband “turned old overnight , ” she said . “it was such a blow to him , to realize that everything he worked for all of his life , someone else just”—she snapped her fingers—“plucked . ”
eventually , bernie hired a full - time financial executive to take over the billing and banking . “and ruth eased her way out , ” says squillari . but ruth still wrote checks on her husband’s behalf . most mornings she left a to - do list for bernie . and her name pops up frequently in the hundreds of pages of madoff documents recently released by the bankruptcy trustee . the papers , which track the ebb and flow of billions of dollars , also show that many of madoff’s assets were in ruth’s name . “the books and records of blmis [ bernard l . madoff investment securities ] show that madoff also used blmis funds to purchase assets for his personal enjoyment and that of his family , ” reads one affidavit . “madoff and his family created a web of shell companies to hold these assets after purchasing same with blmis funds . for example , blmis funds were used to purchase and maintain two yachts , the first in 2003 and the second in 2007 . . . . these yachts were used by madoff and his family and served no apparent business purpose . the second yacht , named bull , is held by yacht bull corporation , a corporation in which ruth madoff has an interest . ”
in light of the foregoing , it is clear that jaffe has agreed to
submit myself
– literally , his person – to the jurisdiction of massachusetts , and
to comply with , be subject to and abide by . . . all . . . orders [ and ] directives
of massachusetts . it is also clear that the secretary ' s
command [ ] , in the name of the commonwealth of massachusetts to appear personally and give testimony before the massachusetts securities division , office of the secretary ,
is both an
order
and
directive
by the commonwealth to appear . see in re simon , 297 f . 942 , 945 ( 2d cir . 1924 ) , quoting burns v . superior court , 140 cal . 1 , 73 p . 597 , 598 ( 1903 ) (
the very etymology of the word ‘subpoena ' signifies ‘an order with a penalty for disobedience . '
) having already determined that the subpoena is otherwise within the investigatory authority of the secretary under § 407 ( a ) , the court further concludes that jaffe has consented to the exercise of jurisdiction by the commonwealth ( represented by the secretary ) over his person by means of the subpoena .