Madoff is a former head of NasDaq. He is respected asone of the great gurus of Wall St. Actually the scheme was not uncovered, Madoff fessed up to two of his employees and they tipped off the feds.
In the early 90s the Securites and Exchange Commission gave Madoff's Ponzi scheme a clean bill of health. Just last year the SEC cited the "fund" for violations of three best trading practices but refused to investigate further. Madoff had 30 feeder funds that channeled money into his scheme.A few weeks agooverseas investors startedredeeming big time and brought down the Ponzi scheme.
Way to go SEC. Athird year accounting student could have done better.
According to the complaint filed with the U.S. District Court of Southern New York, two senior employees of the securities broker firm told investigators that Madoff ran the advisory business from a separate floor of the securities firm offices. One of the senior employees said that Madoff kept the advisory business' financial records under lock and key and was "cryptic" about its business.
A document filed by Madoff with the Securities and Exchange Commission early this year said the advisory business served between 11 and 25 clients and had about $17.1 billion in assets, the complaint said.
But on Wednesday, the complaint said, Madoff told senior employees that the advisory business was a fraud, that he was "finished," had "absolutely nothing," that "it's all just one big lie" and that it was "basically, a giant Ponzi scheme."
Madoff said the business had lost about $50 billion and that he planned to turn himself in to authorities in a week. But, the complaint said, he told the employees he wanted to distribute the $200 million to $300 million he had left to certain selected employees, family and friends.
Madoff faces a maximum penalty of 20 years in prison and a $5 million fine if he is convicted.
Bloomberg also reported that the SEC sued Madoff Thursday, accusing him of a "multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm." In the suit filed in Manhattan federal court, the SEC said it was seeking an asset freeze and appointment of a receiver for the firm as emergency relief for investors, Bloomberg said.
Just read it. His lawyer said he was a man of integrity and planed to fight it.
Bad news come and the country seems to just absorbs it, stuff like this though. Going to be some very powerful desperate people who think lifes not worth living running around with idea's.
I had to look up the definition of Ponzi Scheme. Exactly how is that different than social security?
Well people like this caused the market to crash in 29 giving us SS. I'd say like father like son.
The free market is always in control till it's not. Don't like government intrusion, don't give it a chance to intrude. Be a much stronger advocate of demanding the free market clean up it's act. It won't though, it doesn't have the will power and must always be shakled like my dog. This guys proof of it.
Exactly how is that different than social security?
It ain't any different. If i ever decidethata DBA is what i want, mythesis will be written on S/S as a Ponzi scheme.
Madoff had established a good reputation for himself. Most of his US investors were flush with money: Some were close friends. One family lost 100 million dollars. Some good sized charities were probably ruined by by the Madoff scheme.
This is a fine example of what happens when government agencies fail to do their job. The warning signs were there but Madoff was a very rich an powerful Wall St. panjandrumand the SEC was afraid to touch him. Wonder how many more Wall St. Ponzi schemes are in operation?
Madoff fessed up to his sons who claim to know nothing of the Ponzi scheme-yeah right.
Quote:
The roster of potential victims in what prosecutors said was a $50 billion Ponzi scheme has grown exponentially longer in the past few days.
Madoff, 70, said in regulatory filings that he only had around 25 clients, but it has become apparent that the list of people who lost money may number in the hundreds or even thousands. Among those who have acknowledged potential losses so far: Former Philadelphia Eagles owner Norman Braman, New York Mets owner Fred Wilpon and J. Ezra Merkin, the chairman of GMAC Financial Services.
A charity in Massachusetts that supports Jewish programs, the Robert I. Lappin Charitable Foundation, said it had invested its entire $8 million endowment with Madoff. The organization's executive director said she doesn't expect it to survive.
Other institutions that believed they had lost millions included The North Shore-Long Island Jewish Health System and the Texas-based Julian J. Levitt Foundation.
Hedge funds and other investment groups looked like big losers too. The Fairfield Greenwich Group said it had some $7.5 billion in investments linked to Madoff. A private Swiss bank, Banque Benedict Hentsch Fairfield Partners SA, said it had $47.5 million worth of client assets at risk.
The losses may have extended far beyond the coffers of the wealthy and powerful. The town of Fairfield, Conn., said it placed nearly 15 percent of its retiree pension fund with Madoff. Officials were scrambling to determine how much of the $42 million remained.
Harry Susman, an attorney in Houston, said he represents a group of clients who had unknowingly become entangled in the scandal by investing in a hedge fund managed by Merkin, which then put almost all of its $1.8 billion in capital in Madoff's hands. "They had no idea they had exposure," Susman said. He said his clients were now dumbfounded as to how the fund came to invest all of its holdings with just one man, especially since concerns had been circulating for years about Madoff's operations.
Don't like government intrusion, don't give it a chance to intrude.
Amen, brother.
This stuff is like gun control in a small way. The laws, the remedies for this stuff are already in place. But it seems no matter what, when a story like this breaks, more laws are passed because those in charge fear responding with only the enforcement of existing laws. And on it goes.
But it seems no matter what, when a story like this breaks, more laws are passed because those in charge fear responding with only the enforcement of existing laws
This Ponzi scheme went for decades because the SECrefused to thoroughly investigate aa crooked Wall Streeter who was viewed as an icon. The danger signs were there. Folks complained to the SEC that this guy was not legitimate. Madoff was cited last year for three violations by the SEC who did not audit him.
50 Billion $ Wall St. Ponzi Scheme Uncovered
