Steven Winters is the founder and managing partner of Gemini Strategies, a boutique Cardiff investment firm. His bio says that from 1994 through 1996, he was an equity and derivatives portfolio manager for Bernard L. Madoff Investment Securities in New York, now being liquidated. Bernard Madoff has admitted to running a $50 billion Ponzi scheme. According to news reports, Madoff was turned in to authorities by his two sons, whom Winters fondly calls "Mark and Andy." Winters worked with Madoff's two sons at the Madoff investment securities firm, which was on the 19th floor of a Manhattan building. It was a trading house -- one of Wall Street's larger ones. Bernard Madoff invested funds for a select group of high-wealth people, and also hedge funds, out of the 17th floor. "The 17th floor was restricted access. It was somewhat cryptic as to what went on there," says Winters. "I do know Bernie; this was a gentleman who was in a suit and there every day meeting with clients, regulators -- this was not a shadowy figure lurking in the background." Says Winters: "I worked with Andy and Mark. I always believed they had a high level of ethics. I hope I am not mistaken in that." In managing billions of dollars for others, Bernie Madoff used a "split strike" strategy, says Winters. "He would buy a stock or a basket of stocks and buy puts and calls (options) around them." Bernie Madoff would tell his investors they were making 10 to 12 percent a year, in good markets and bad markets. "This was a guy who had little volatility -- few to no down months." And that raised questions: "Within the hedge fund community, there were questions. Often, potential investors in my business would ask me what insight I had -- unfortunately, I didn't have much insight." (The Securities and Exchange Commission admitted today, Dec. 17, that it essentially blew the Madoff case, and is investigating what happened.) Winters had been there when he was a young man; he had begun his career in 1991, only three years before joining the Madoff firm. Winters's Gemini firm specializes in Private Investments in Public Equity, known as PIPE. This involves the selling of some form of preferred stock or convertible security in a publicly-held company to private investors. PIPEs have been controversial and their usage has fluctuated, because often, when a small, difficult-to-finance company raises money through a PIPE, the existing shareholders suffer dilution. Also, the private owners may end up controlling the small firm if it goes down. For this and other reasons, PIPE deals can be known as "death spiral" or "toxic convertible" deals. As recently as two years ago, 10 percent of PIPE deals were death spirals, according to TheStreet.com. I asked Winters if Gemini had been involved in death spirals. "We don't discuss our portfolio," he says. "We invest in small cap and microcap stocks. Not all of our companies have succeeded." Gemini doesn't disclose how much it has under management.