Bernard’s most recent 50 political contributions. I’m guessing a Ponzi scheme would have been cooler. Seems like he madoff with a lot of money.
Bernard Madoff, a long-time fixture and powerful adviser on Wall Street, was arrested and charged on Thursday with allegedly running a $50 billion Ponzi scheme, U.S. authorities said.
The former chairman of the Nasdaq Stock Market who remains a member of Nasdaq OMX Group Inc’s nominating committee, is best known as the founder of Bernard L. Madoff Investment Securities LLC, the closely-held market-making firm he founded in 1960.
But the alleged fraud involved a hedge fund he ran from a separate floor of the building where his brokerage is based.
Bernard Madoff told senior employees of his firm on Wednesday that “it’s all just one big lie” and that it was “basically, a giant Ponzi scheme,” with estimated investor losses of about $50 billion, according to a criminal complaint against him.
A Ponzi scheme is a pyramid-type swindle in which very high returns are promised to early investors, who are paid off with money put up by later ones.
The $50 billion allegedly lost to investors would make Madoff’s fund one of the biggest frauds in history. When Enron filed for bankruptcy in 2001, one of the largest at the time, it had $63.4 billion in assets.
Prosecutors charged Bernard Madoff, 70, with a single count of securities fraud. They said he faces up to 20 years in prison and a fine of up to $5 million.
“Bernard Madoff stated that the business was insolvent, and that it had been for years,” Lev Dassin, acting United States Attorney for the Southern District of New York, said in a statement.
Authorities said that, according to a document filed by Bernard Madoff with the U.S. Securities and Exchange Commission (SEC) on January 7, 2008, Madoff’s investment advisory business served between 11 and 25 clients and had a total of about $17.1 billion in assets under management.
The Madoff Story Is Huge
The story of Bernard Madoff, if the charges of fraud are true, is the single biggest financial story of the year.It is bigger than WorldCom, bigger than Boesky and bigger than Tyco.
It attacks at the core of investor confidence -- because, if true, and this could happen ... Investors might think that almost anything imaginable could happen to the money they have entrusted to their fiduciaries.
And it helps to explain why Treasury bill returns are basically at zero.
For more, check out the SEC's statement on Madoff's arrest as well as Jim Cramer's take on the scandal.
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