CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC INTERVIEWS FORMER MADOFF TRADER ANDREW COHEN TODAY ON "POWER LUNCH"

WHEN: Today, Wednesday, December 17th 12:20 PM ET

WHERE: CNBC's "Power Lunch"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with former Madoff trader Andrew Cohen today on CNBC's "Power Lunch."

All references must be sourced to CNBC.

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MICHELLE CARUSO CABRERA: SO YOU WERE A TRADER THROUGHOUT THE '90s FOR BERNIE MADOFF, CAN YOU TELL US WHAT WAS HE LIKE AND DID YOU EVER THINK IT WAS POSSIBLE FOR HIM TO DO SOMETHING LIKE THIS?

ANDREW COHEN: I THOUGHT BERNIE WAS A GREAT GUY, I MEAN, HE SEEMED LIKE A WARM, GENEROUS, GENERALLY WONDERFUL PERSON. ALMOST EVERYONE ON THE TRADING FLOOR LIKED HIM. HE HAD A GREAT SENSE OF HUMOR HE SEEMED TO REALLY CARE ABOUT HIS FAMILY AND EMPLOYEES AND HE WAS VERY LOYAL TO EVERYBODY, EVEN SOME EMPLOYEES THAT DIDN'T PERFORM WELL HE WOULD NEVER FIRE THEM, HE WOULD ALWAYS TRY TO FIND SOMETHING FOR THEM TO DO.

CARUSO CABRERA: DO YOU BELIEVE HE DID IT?

COHEN: WELL, OBVIOUSLY FROM THE FACTS I'M HEARING, I MEAN, I'M STILL IN SHOCK BY IT.

SUE HERERA: AND HOW DO YOU THINK HE DID IT? YOU WERE KIND OF ON THE INSIDE. YOU WORKED FOR THE TWO SONS, YOU DID YOU NOT WORK DIRECTLY UNDER BERNIE AS I UNDERSTAND IT, BUT HOW DO YOU THINK HE WAS ABLE TO ORCHESTRATE THIS OVER SUCH A LONG PERIOD OF TIME?

COHEN: WELL, THAT'S WHAT'S SO SHOCKING. FIRST OF ALL, YOU KNOW, I WORKED ON THE TRADING SIDE WHICH WAS THE LEGITIMATE SIDE OF THE BUSINESS. I NEVER HAD TOO MUCH CONTACT WITH THE SO-CALLED 17th FLOOR, BUT I GUESS WHAT THE EVIL GENIUS OF HIS SCHEME IS AND, AGAIN, I DON'T KNOW WHEN IT WAS LEGIT AND WHEN IT BECAME A PONZI SCHEME, HE'S OBVIOUSLY SHOWING GREAT RETURNS FOR PEOPLE AND THEN THEY ARE SHOWING GREAT RETURNS TO THEIR FRIENDS SO IT'S GREAT ADVERTISING ABOUT HIM. I INITIALLY HAD NOTHING TO DO WITH THERE, BUT I STARTED TO HEAR ABOUT PEOPLE GETTING REALLY GOOD RETURNS SO I WAS INTERESTED, AS OTHER PEOPLE WERE, IN MAKING GOOD RETURNS, IT WAS ALMOST LIKE A REWARD TO BE ABLE TO ALLOW TO INVEST WITH HIM.

DENNIS KNEALE: ARE THEY GOING TO COME AFTER YOU FOR SOME OF YOUR MONEY TO GET IT BACK IF YOU MADE MONEY OFF OF BERNIE MADOFF?

COHEN: I DIDN'T MAKE MONEY. I LOST ALMOST MY WHOLE FORTUNE SO I'M -

KNEALE: YOU STILL HAD MONEY THERE EVEN AFTER QUITTING THE FIRM?

COHEN: YES, WHY I, I LEFT MOST OF MY MONEY IN THERE BECAUSE I TRUSTED HIM, UNFORTUNATELY, YES.

CARUSO CABRERA: AND SO HOW IS YOUR LIFE GOING TO CHANGE AS A RESULT OF THIS?

COHEN: WELL, I'M STILL TRYING TO FIGURE IT OUT. I MEAN, ONE MOMENT I WAS ENJOYING A RELATIVELY, I MEAN A VERY, VERY HAPPY LIFE, TEACHING A FITNESS CLASS AND YOGA CLASS OVER AT THE GYM AND SUDDENLY I GET A PHONE CALL FROM SOME FRIENDS OF MINE AND IN ONE MINUTE I FIND OUT THAT MY WHOLE NET WORTH IS JUST ABOUT GONE.

HERERA: ANDREW, WE CERTAINLY FEEL FOR YOU BECAUSE IT'S OBVIOUSLY A VERY, VERY DIFFICULT SITUATION THAT YOU FIND YOURSELF IN, BUT YOU'RE ONE OF THE FEW PEOPLE WHO HAS AGREED TO TALK ABOUT THIS AND ONE OF THE ISSUES THAT PEOPLE HAVE IS THE FACT THAT HE SEEMED TO BE ABLE TO PRODUCE STATEMENTS THAT MATCHED UP WITH DIFFERENT TRADES AND THERE WERE PEOPLE WHO HAD YEARS AND YEARS OF STATEMENTS THAT SEEMED TO MAKE PERFECT SENSE. YOU CAN'T THINK THAT HE DID IT ALONE, YOU KNOW. WHAT'S YOUR SPECULATION AS TO HOW THIS ALL PLAYED OUT AND WHO MIGHT ELSE HAVE BEEN INVOLVED? HE COULDN'T HAVE DONE ALL OF THIS HIMSELF?

COHEN: NO THERE DEFINITELY HAD TO BE A LOT OF OTHER PEOPLE INVOLVED. AGAIN, I WAS ON A SEPARATE FLOOR AND, YOU KNOW, THE INTERESTING THING IS WHEN I FIRST WAS TRADING OVER THERE AT MADOFF, AS YOU KNOW FRANK DEPASQUALE WAS HIS RIGHT-HAND MAN, I DON'T KNOW WHAT THE DETAILS OF IT WERE, BUT INITIALLY HE USED TO COME TO US AND SOMETIMES HAVE US AS A TRADER EXECUTE TRADES FOR HIS ACCOUNT. WE WOULD THEN BUY CERTAIN STOCKS FOR, YOU KNOW, DEPENDING WHICH STOCKS WERE MARKED MAKING IN, AND THEN HE WOULD TAKE OUT THE TRADES FROM OUR ACCOUNT, AVERAGE PRICE THEM AND I WOULD ASSUME THAT WOULD GO TO HIS INVESTMENT ACCOUNTS.

HERERA: WHAT KIND OF TRADES, EXOTIC TRADES, RUN OF THE MILL TRADES?

COHEN: THEY WERE SIMPLE BUYS. MY THOUGHTS WERE ON THE STRATEGY, WHEN I WAS AT GOLDMAN SACHS I NOTICED THE PEOPLE THERE DOING A LOT OF ARBITRAGE WHERE THEY WOULD - YOU KNOW, THE MARKET BECOMES INEFFICIENT TO SOME DEGREE, THE FUTURES PRICES BECOME, YOU KNOW, OVERPRICED COMPARED TO STOCKS OR VICE VERSA AND YOU COULD REVERSE THE TRADES. IT SEEMED LIKE BERNIE'S STRATEGY WAS SIMPLE. HE WOULD BUY STOCKS, YOU KNOW, REAP THE DIVIDENDS FROM THEM IN ADDITION AND HEDGE IT BY, YOU KNOW, BUYING PUTS AND SELLING CALLS AND I GUESS HE WOULD MAKE SOME SMALL RETURNS. RETURNS I WAS GETTING WAS NOT EXORBITANT. I MEAN, OF COURSE, LOOKING BACK NOW, YOU KNOW, HOW DID HE KEEP SUCH STEADY RETURNS OVER ALL OF THESE YEARS, SHOULD HAVE DRAWN MORE RED FLAGS BUT, YOU KNOW, AT THE TIME THEY CERTAINLY LOOKED LEGIT TO ME WHEN I WAS TRADING THERE, AND, AGAIN, I DIDN'T INVEST MONEY WITH HIM UNTIL TOWARDS THE END OF MY TRADING WHEN I BECAME KIND OF ONE OF THE ECCENTRIC VERY PROFITABLE TRADERS THERE.

CARUSO CABRERA: YOU KNOW IT, YOU SENT US A PHOTO, DO WE HAVE THIS PHOTO READY? ONE OF THE BIG PERKS, IF YOU WERE A PROFITABLE TRADER FOR BERNIE MADOFF, YOU GOT TO DO SOMETHING - WE'RE SHOWING PEOPLE A PHOTO FROM SHEA STADIUM. WHAT HAPPENED AND WHO IS IN THIS PICTURE?

COHEN: OKAY. WELL, I DON'T SEE THE PICTURE IN FRONT OF ME, BUT, YES, ONCE A YEAR WE WOULD - BERNIE AND FRED WILPON WERE GOOD FRIENDS AND WE USED TO HAVE A PICNIC, AN AFTERNOON OVER AT SHEA STADIUM AND WOULD PLAY A SOFTBALL GAME AGAINST METS BRASS AND MANAGEMENT AND WE WOULD HAVE ALL OF SHEA STADIUM TO OURSELVES. BUT IF YOU LOOK AT THE PICTURE, YOU KNOW, MOST OF US ARE HAVING A GOOD TIME, WE'RE IN SHORTS AND YOU CAN SEE MARK MADOFF KIND OF STIFF THERE.

CARUSO CABRERA: MARK MADOFF IS THE GUY IN THE DARK SUIT, HE'S GOT A SHIRT AND TIE ON.

COHEN: HE STILL GOT A SHIRT AND TIE ON, THAT'S RIGHT. MOST OF THE REST OF US ARE IN SHORTS JUST ENJOYING THE SOFTBALL GAME IN THE NICE AFTERNOON, SHEA STADIUM.

CARUSO CABRERA: THAT'S PRETTY COOL, A GREAT PERK TO BE ABLE TO PLAY ON THE FIELD OF SHEA STADIUM.

COHEN: YEAH, I MEAN IT WAS FUN. THE CULTURE OF THE FIRM WAS REALLY OVERALL VERY GOOD. I MEAN IT WAS VERY RELAXED FOR ME CERTAINLY. I USED TO ROLLERBLADE TO WORK EVERY DAY. I USED TO - BERNIE LET ME USE HIS OFFICE, I USED TO BE ABLE TO - YOU KNOW TO DE-STRESS I USED TO DO YOGA. I USED TO GO TO BERNIE'S OFFICE AND DO A HEADSTAND OR A CROW AND JUST -

CARUSO CABRERA: WHAT DID HE SAY TO YOU?

COHEN: HE USED TO LAUGH. HIM AND MARK AND ANDY USED TO GET A BIG KICK OUT OF ME. I THINK I WAS A BIG SOURCE OF ENTERTAINMENT FOR THEM AND THE WHOLE FIRM.

HERERA: YOU MUST FEEL SO BETRAYED THOUGH. OBVIOUSLY YOU ENJOYED YOUR TIME THERE, WHAT DO YOU PLAN TO DO? DO YOU PLAN TO PURSUE LEGAL ACTION? WHAT DO YOU THINK YOUR OPTIONS ARE?

COHEN: YEAH, I MEAN, OBVIOUSLY I'M HOPING - I HEAR THAT THE SIPC IS GOING TO THROW A$500,000 LIFELINE WHICH I'M HOPING TO BE ABLE TO ACCESS THAT AND I GUESS WE'LL FIND OUT WHAT MONEY THEY RECOVER. IT'S STILL SO SHOCKING, THAT YOU KNOW, YOU HEAR ABOUT IT AND NOW YOU TRY TO GO ON WITH YOUR EVERYDAY LIFE AND HAVE A BEAUTIFUL WIFE AND TWO WONDERFUL KIDS AND I'M TRYING TO FOCUS ON THEM AND, YOU KNOW, APPRECIATE THE IMPORTANT THINGS IN LIFE, LIKE MY HEALTH AND, YOU KNOW, EVERYTHING THAT I DO HAVE WHICH, YOU KNOW, FORTUNATELY FOR ME AS FAR AS - I'M NOT - I DON'T NEED A LOT AND THE WAY I'M DRESSED, I DON'T NEED MUCH MATERIAL THINGS.

CARUSO CABRERA: YOU'RE A PERSONAL TRAINER, YOGA INSTRUCTOR. SO YOU'RE IN YOUR UNIFORM?

COHEN: EXACTLY. I DON'T NEED MUCH AND EVEN WHEN I WORKED THERE, I USED TO ROLLERBLADE TO WORK, YOU KNOW. I USED TO - I MEAN, I NEVER - AGAIN, THE WORKING WAS FOR ME WAS TO HAVE THE MEANS TO HAVE THE FREEDOM TO DO WHAT I WANT, NOT TO MAKE A LOT OF MONEY. BUT OBVIOUSLY NOW MY LIFE HAS TOTALLY CHANGED IN A FINANCIAL SENSE AND I HAVE TO THINK OF, YOU KNOW, WHAT I CAN DO TO KEEP A GOOD QUALITY OF LIFE, THAT'S NOT THE MATERIAL THINGS BUT CERTAINLY AND, OF COURSE, IT'S GOING TO BE A LONG EXPERIENCE - I MEAN I STILL CAN'T SLEEP AT NIGHT, TO GET OVER THIS TERRIBLE TRAGEDY AND, AGAIN, IT'S SHOCKING.

CARUSO CABRERA: CAN WE PRESS YOU, CAN YOU GIVE US ANY SENSE OF HOW MUCH YOU THOUGHT YOU HAD, ANY ORDERS OF MAGNITUDE THERE?

COHEN: I DON'T WANT TO GO INTO NUMBERS. JUST KNOW THAT MOST OF MY NET WORTH AND, YOU KNOW, THE IRONY OF THE WHOLE THING, IS YOU KNOW, JUST SAYING A FEW DAYS BEFORE THIS HAPPENED, AS I SEE A LOT OF MY FRIENDS AND FAMILY LOSING A LOT OF MONEY IN THE STOCK MARKET AND REAL ESTATE AND EVERYTHING ELSE, AND I WAS THINKING, WELL, THANK GOODNESS I HAVE MY MONEY AT MADOFF, THEY ARE STILL GETTING SOLID RETURNS. AND NOW THOSE OF YOU THAT LOST A GOOD CHUNK OF YOUR MONEY IN REAL ESTATE AND STOCKS AND OTHER INVESTMENTS, BE THANKFUL YOU STILL, YOU KNOW, A GOOD CHUNK OF IT LEFT AND NOT BE SOMEONE LIKE MYSELF OR OTHER INVESTORS WHO NOW ARE BASICALLY - HAVE LOST, YOU KNOW, ALMOST 100% OF THEIR INVESTMENT.

HERERA: BEFORE WE LET YOU GO, A LOT OF PEOPLE ARE SAYING THAT THERE WERE SOME RED FLAGS. DID IT SEEM ODD TO YOU THAT YOU NEVER GOT ON TO THAT 17th FLOOR? WERE THERE ANY RED FLAGS THAT EVER KIND OF STUCK OUT TO YOU THAT MADE YOU THINK THAT PERHAPS THINGS WEREN'T WHAT THEY SHOULD HAVE BEEN?

COHEN: WELL, YOU KNOW, A COUPLE OF THINGS CERTAINLY FROM MY POINT OF VIEW. I DIDN'T GET INTO THE - I CAN'T LOOK AT MY EXACT RECORDS, BUT I DIDN'T START GETTING INTO CERTAINLY THE ACCOUNT UNTIL MAYBE A YEAR OR TWO BEFORE I QUIT THE FIRM, WHEN I LEFT IN 2000, AND, YOU KNOW, KNOWING BERNIE, AS I HAD AND, AGAIN, THE TRADING FLOOR WAS VERY PROFITABLE, IT DIDN'T MAKE SENSE, WHY WOULD HE RISK EVERYTHING? HIS REPUTATION, EVERYTHING, WHEN HE HAD A PROFITABLE TRADING FLOOR. I MEAN, THE GUY WAS CHAIRMAN OF THE NASDAQ, YOU KNOW. HE KNEW SO MANY IMPORTANT PEOPLE, NOW IF I HAD POSSIBLY STAYED THERE AND STAYED IN TOUCH, MAYBE SOME RED FLAGS WOULD HAVE HIT ME, YOU KNOW. CERTAINLY I HAD NO IDEA HOW BIG HIS ACCOUNTS WERE. HAD I KNOWN HE HAD SO MANY BILLIONS IN ASSETS, THEN YES, AND I DON'T KNOW HOW THE S.E.C. MISSED THIS BECAUSE IF YOU THINK ABOUT THE TRADES HE DID, IT'S ONE THING IF YOU HAVE A SMALL AMOUNT OF MONEY UNDER ASSETS AND YOU HAVE SOME ARBITRAGE OPPORTUNITY, THEN CAN YOU KIND OF BEING NIMBLE AND GET IN WHEN STOCK PRICES ARE POSSIBLY LOWER COMPARED TO WHERE THE FAIR VALUE IS BASED ON THE OPTION-HEDGING STRATEGY. YOU CAN YOU KIND OF GET IN QUICKLY. BUT WITH BILLIONS OF DOLLARS IT WOULD BE TOTALLY IMPOSSIBLE TO DO THESE TRADES IF YOU'RE TRYING TO GET IN TO BUY THE STOCKS YOUR TRADES ARE GOING TO FORCE THE PRICE OF THESE STOCKS UP SO HARD THERE'S NO POSSIBLE WAY. YOU'D BE LOSING MONEY BY THE YOU GET INTO THE TRADE, THE ARBITRAGE ISSUE WOULD BE REVERSED AND SOMEONE ELSE COULD GO ON THE OTHER SIDE AND MAKE MONEY. THE OTHER THING IS, FROM 2000 ON, I'VE NOT BEEN INVOLVED WITH WALL STREET AT ALL. I'VE BEEN DOING THINGS HOPEFULLY - I TAUGHT A CLASS AT ODU, I DID -

CARUSO CABRERA: YOU'RE IN GREAT SHAPE, I CAN TELL.

COHEN: I'VE DEVOTED MY LIFE TO FITNESS AND HELPING PEOPLE, TRAIN PEOPLE AND GET IN GREAT SHAPE, YOU KNOW, SPENT TIME WITH MY FAMILY. ONE REASON I COULD QUIT IS SO THAT I COULD BE THE DAD THAT'S ALWAYS THERE FOR MY KIDS AND I'VE LOVED THAT EXPERIENCE. THANK GOODNESS AT LEAST I'VE HAD EIGHT YEARS OF SPENDING MOST OF MY TIME WITH MY FAMILY AND DOING WHAT I WANTED TO DO.

CARUSO CABRERA: WELL, ANDREW, THANK YOU FOR SPENDING SOME TIME WITH US. I KNOW THAT WE'LL TALK WITH YOU A LITTLE BIT MORE OFF CAMERA RIGHT AFTER THIS BUT WE APPRECIATE YOU JOINING US LIVE HERE ON "POWER LUNCH."



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