MADDEN GETS 41 MONTHS
Byline: Vicki M. Young
NEW YORK — Footwear magnate Steve Madden got a bit more than a slap on the wrist Thursday.
Sentenced in a Manhattan federal court 11 months after pleading guilty to two counts of stock manipulation, Madden was sentenced to 41 months for each of two counts, to be served concurrently, and ordered to pay a fine of $81,000. He will be subject to two years of supervised release after serving time.
Judge Kimba Wood also ordered restitution of $3.1 million, with a credit of $1.5 million already paid by Madden. Additionally, Madden agreed to pay $1.2 million in forfeitures, plus interest.
“I wish I could go back in time,” Madden said during the hearing. “I was guilty of stupidity, arrogance and greed. I just want the chance to get back my name. I just want a chance to pay my debt to society and start fresh.”
Madden could be released up to a year before his 41-month sentence is up if he participates in drug and alcohol treatment while in prison. Wood said the sentence could be reduced if his “efforts are deemed worthy.”
He was ordered to surrender to federal authorities at noon on Aug. 15.
Madden will serve his sentence at a federal camp. He has expressed a desire to be at Eglin Air Force Base, close to Valparaiso, Fla. His parents and brother live nearby.
Madden’s attorney, Joel Winograd, of Winograd and Winograd, said his client will not be able to retain the post of chief design officer of the company bearing his name while incarcerated.
According to Winograd, Judge John Gleason, in whose Brooklyn court Madden still awaits sentencing on the same charges, has agreed to impose the same penalty as his Manhattan counterpart. In that case, Madden wouldn’t be sentenced to additional jail time.
Steven Madden Ltd., the firm founded by the defendant, was not a party in either the Brooklyn or Manhattan case.
The company released a statement noting: “As a company, we have been preparing for this moment for some time by putting in place a strong management team and the most talented group of designers in the footwear business. Steven Madden Ltd. has performed well throughout this challenging time and is well positioned to continue its success.”
As reported, Madden was arrested in June 2000 on separate indictments filed in Manhattan and Brooklyn federal courts, charging him with participation in schemes to manipulate initial public offerings — including the 1993 IPO of his own company. The charges arose from IPOs underwritten by Stratton Oakmont Inc. and Monroe Parker Securities Inc., both now defunct.
At the time, the Securities and Exchange Commission, in a separate action, filed a civil injunctive action in Brooklyn federal court alleging that Madden violated federal securities laws by participating in the manipulation of more than 20 IPOs underwritten by the defunct firms over a six-year period.
Madden pled guilty to two counts of stock manipulation in May 2001. He also settled separate charges with the SEC, and agreed to pay penalties and to be barred from serving as a director or officer of a public company for a period of seven years.