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Bernard Madoff $50 Billion Ponzi Scheme

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Last Post: 3/4/2016 11:21:18 AM - Followers: 12 - Board type: Free - Posts Today: 0

Here is a list of the once super wealthy - His clients

a great resource

WOW for ten years Harry Markopolos was after the SEC 

Here is the original news
NEW YORK (Reuters) – Bernard Madoff, a quiet force on Wall Street for decades, was arrested and charged on Thursday with allegedly running a $50 billion "Ponzi scheme" in what may rank among the biggest fraud cases ever.

The former chairman of the Nasdaq Stock Market is best known as the founder of Bernard L. Madoff Investment Securities LLC, the closely-held market-making firm he launched in 1960. But he also ran a hedge fund that U.S. prosecutors said racked up $50 billion of fraudulent losses.

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 the U.S. Attorney's criminal complaint against him.

A Ponzi scheme is a swindle offering unusually high returns, with early investors paid off with money from later investors.

On Thursday, two agents for the U.S. Federal Bureau of Investigation entered Madoff's New York apartment.

"There is no innocent explanation," Madoff said, according to the criminal complaint. He told the agents that it was all his fault, and that he "paid investors with money that wasn't there," according to the complaint.

The $50 billion allegedly lost would make the hedge fund one of the biggest frauds in history. When former energy trading giant Enron filed for bankruptcy in 2001, one of the largest at the time, it had $63.4 billion in assets.

U.S. prosecutors charged 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.

The Securities and Exchange Commission filed separate civil charges against Madoff.

"Our complaint alleges a stunning fraud -- both in terms of scope and duration," said Scott Friestad, the SEC's deputy enforcer. "We are moving quickly and decisively to stop the scheme and protect the remaining assets for investors."

Dan Horwitz, Madoff's lawyer, told reporters outside a downtown Manhattan courtroom where he was charged, "Bernard Madoff is a longstanding leader in the financial services industry. We will fight to get through this unfortunate set of events."

A shaken Madoff stared at the ground as reporters peppered him with questions. He was released after posting a $10 million bond secured by his Manhattan apartment.

Authorities, citing a document filed by Madoff with the U.S. Securities and Exchange Commission on January 7, 2008, said Madoff's investment advisory business served between 11 and 25 clients and had a total of about $17.1 billion in assets under management. Those clients may have included other funds that in turn had many investors.

The SEC said it appeared that virtually all of the assets of his hedge fund business were missing.


An investor in the hedge fund said it generated consistent returns, which was part of the attraction. Since 2004, annual returns averaged around 8 percent and ranged from 7.3 percent to 9 percent, but last decade returns were typically in the low-double digits, the investor said.

The fund told investors it followed a "split strike conversion" strategy, which entailed owning stock and buying and selling options to limit downside risk, said the investor, who requested anonymity.

Jon Najarian, an acquaintance of Madoff who has traded options for decades, said "Many of us questioned how that strategy could generate those kinds of returns so consistently."

Najarian, co-founder of, once tried to buy what was then the Cincinnati Stock Exchange when Madoff was a major seatholder on the exchange. Najarian met with Madoff, who rejected his bid.

"He always seemed to be a straight shooter. I was shocked by this news," Najarian said.


Madoff had long kept the financial statements for his hedge fund business under "lock and key," according to prosecutors, and was "cryptic" about the firm. The hedge fund business was located on a separate floor from the market-making business.

Madoff has been conducting a Ponzi scheme since at least 2005, the U.S. said. Around the first week of December, Madoff told a senior employee that hedge fund clients had requested about $7 billion of their money back, and that he was struggling to pay them.

Investors have been pulling money out of hedge funds, even those performing well, in an effort to reduce risk in their portfolios as the global economy weakens.

The fraud alleged here could further encourage investors to pull money from hedge funds.

"This is a major blow to confidence that is already shattered -- anyone on the fence will probably try to take their money out," said Doug Kass, president of hedge fund Seabreeze Partners Management. Kass noted that investors that put in requests to withdraw their money can subsequently decide to leave it in the fund if they wish.

Bernard L. Madoff Investment Securities has more than $700 million in capital, according to its website.

Madoff remains a member of Nasdaq OMX Group Inc's nominating committee, and his firm is a market maker for about 350 Nasdaq stocks, including Apple, EBay and Dell, according to the website.

The website also states that Madoff himself has "a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm's hallmark."

The company's website may be found here:

(Additional reporting by Christian Plumb, Phil Wahba, Michelle Nichols and Jennifer Ablan in New York and Rachelle Younglai in Washington; Editing by Andre Grenon, Bernard Orr and Alex Richardson)

#2064  Sticky Note Bernard L. Madoff Investment Securities LLC Liquidation Proceeding scion 03/14/11 11:13:54 AM
#2382   The Mystery Madoff Victims Who Left $2.5 Billion scion 03/04/16 11:21:18 AM
#2381   'Madoff' Mini-Series Brings Swindler Story to Life scion 02/03/16 02:30:12 PM
#2380   Prosecutors seek fund manager fine as Swiss Madoff scion 12/07/15 12:00:00 PM
#2379   Statement Regarding Recovery Agreement of $46.6 Million Reached scion 11/04/15 02:00:06 PM
#2378   DATE 1-U.S. Supreme Court rejects appeal from Madoff scion 10/05/15 11:06:09 AM
#2377   Ex-accounting executive avoids prison in Madoff fraud case scion 07/09/15 08:22:34 PM
#2376   Accounting Executive to Be Sentenced in Madoff Fraud Case scion 07/09/15 01:39:51 PM
#2375   Heiress wants $7.4M from IRS over Madoff swindle scion 07/06/15 12:04:53 PM
#2374   Madoff trustee to recoup $140 million from Plaza scion 06/19/15 02:12:00 PM
#2373   Ex-Madoff auditor sentenced to home confinement scion 05/28/15 02:43:06 PM
#2372   Madoff feeder fund settles; victims' recovery tops $10.6 billion scion 03/23/15 07:33:25 PM
#2371   Madoff trustee to high court: Ruling blocking $4B scion 03/18/15 11:22:11 AM
#2370   Madoff brother's mansion nets $3.5M for victims scion 03/05/15 11:36:51 AM
#2369   Payout to Madoff victims tops $7.2 billion scion 02/09/15 02:10:33 PM
#2368   Bernie Madoff: My late sons never forgave me scion 01/27/15 02:39:45 PM
#2367   U.S. prosecutors seek longer sentences for Madoff aides scion 01/10/15 07:58:29 PM
#2366   Ex-Madoff manager sentenced to six years prison for fraud scion 12/15/14 07:26:43 PM
#2365   Joann Crupi, a former manager at Bernard Madoff's scion 12/15/14 05:15:58 PM
#2364   Ex-Madoff computer programmer gets 2-1/2 years prison for fraud scion 12/10/14 04:49:53 PM
#2363   U.S. judge sentences Madoff aide Bongiorno to six scion 12/09/14 01:10:59 PM
#2362   Madoff's ex-back office director gets 10 years in prison scion 12/08/14 03:27:45 PM
#2361   Madoff trustee loses appeal on clawbacks scion 12/08/14 11:53:22 AM
#2360   Madoff Aide Hired in 1960s Will Be First scion 12/07/14 11:57:22 AM
#2359   Five ex-Madoff aides face up to 20 years scion 12/07/14 11:51:30 AM
#2358   Judge Approves Madoff Settlement, New Deal Reached scion 11/19/14 01:42:49 PM
#2357   Madoff Son Andrew Leaves More Than $15 Million scion 09/12/14 03:38:52 PM
#2356   When a former client’s secretary was arrested for scion 09/06/14 11:49:49 AM
#2355   Andrew Madoff, Who Told of His Father’s Swindle, scion 09/04/14 08:52:56 AM
#2354   Madoff clients stiffed in $410M settlement scion 08/11/14 10:43:57 AM
#2353   U.S. judge won't overturn convictions of five ex-Madoff employees scion 07/24/14 04:52:25 PM
#2352   Judge dismisses suit claiming JPMorgan knew of Madoff fraud scion 07/23/14 08:34:49 PM
#2351   Exclusive: Accountant's plea signals more possible scrutiny of scion 07/08/14 03:49:59 PM
#2350   Madoff, Stanford fraud victims refused appeals by U.S. scion 06/30/14 10:16:02 AM
#2349   Ex-Madoff accountant pleads guilty to aiding fraud scion 06/24/14 07:31:44 PM
#2348   Ex-Madoff accountant expected to plead guilty: court hearing scion 06/17/14 03:49:00 PM
#2347   I'm Bernard Madoff--I'm Telling All. Right Here. Trust scion 05/08/14 01:59:27 PM
#2346 scion 05/08/14 01:58:08 PM
#2345   Trustee: Madoff Victims Could Get All Their Money Back scion 05/08/14 01:55:01 PM
#2344   Madoff trustee sees victims' payout nearing $6 billion scion 03/25/14 06:11:00 PM
#2343   Five Former Employees of Bernie Madoff Found Guilty scion 03/24/14 07:03:50 PM
#2342   Judge drops sick juror from trial of Madoff aides scion 03/20/14 07:04:43 PM
#2341   Madoff aides used 'avalanche of lies' to hide scion 03/04/14 07:20:49 PM
#2340   Ex-Madoff aide pleads ignorance, naivete at U.S. fraud trial scion 02/27/14 10:32:01 PM
#2339   Madoff victim fund receives over 9,000 claims, extends deadline scion 02/21/14 01:25:11 PM
#2338   Madoff jailhouse interview used to bolster NY suit scion 02/21/14 11:33:19 AM
#2337   In reversal, ex-Madoff aide takes stand in his scion 02/18/14 03:08:52 PM
#2336   Former Madoff aides get their day in court scion 02/10/14 10:20:12 AM
#2335   U.S. judge approves JPMorgan's $543 million deal to scion 02/04/14 04:04:00 PM
#2334   Madoff IT Guys Wrote Code for Fakes to scion 01/30/14 04:19:24 AM
#2333   Madoff back in prison after hospitalization for heart attack scion 01/22/14 10:35:12 AM