The Bernie Madoff Scandal
The Bernie Madoff Scandal
Introduction: Bernie Madoff, an American stockbroker, investment advisor chairman of Wall Street firm, has operated the largest financial fraud – Ponzi scheme in U.S. history in 2008. Before he was arrested by FBI agents in December 11, 2008, he was a chairman of Bernard L. Madoff Investment Securities LLC. He founded this Wall Street firm with his family members in 1960. His brother and sons were charge of different and important positions in the company. Before he was sentenced guilty of massive Ponzi scheme, he was also the former non-executive chairman of the NASDAQ stock market. The authorities uncovered Madoff’s asset management unit as a massive Ponzi scheme on December 10, 2008 and arrested and charged him with one count of securities fraud. In the process of investigation, Madoff admitted that he was turning his wealth management operation business into a Ponzi scheme that defrauded thousands of investors of billions of dollars in March 2009. The federal investigators pointed out that Madoff started Ponzi scheme in the 1970s, 10 years later when Bernard L. Madoff Investment Securities LLC was established. Until the date when he was investigated by the federal authorities, stated as almost $65 billion was missing from client accounts, including fabricated gains. In the end of the case, Madoff was sentenced to 150 years in prison, the maximum allowed. His brother, Peter Madoff, was sentenced to 10 years in prison. His son Mark committed suicide by hanging exactly two years after his father’s arrest.
Red flags and Investigation: In the beginning of the Ponzi scheme, he committed to his customers with high returns for their investments. But, according to Madoff, the basic essence of the scheme was that he deposit money into a Chase account, rather than invest money to any legitimate investments, as he admitted during the guilty plea. When customers wanted their money, he just used money
Introduction: Bernie Madoff, an American stockbroker, investment advisor chairman of Wall Street firm, has operated the largest financial fraud – Ponzi scheme in U.S. history in 2008. Before he was arrested by FBI agents in December 11, 2008, he was a chairman of Bernard L. Madoff Investment Securities LLC. He founded this Wall Street firm with his family members in 1960. His brother and sons were charge of different and important positions in the company. Before he was sentenced guilty of massive Ponzi scheme, he was also the former non-executive chairman of the NASDAQ stock market. The authorities uncovered Madoff’s asset management unit as a massive Ponzi scheme on December 10, 2008 and arrested and charged him with one count of securities fraud. In the process of investigation, Madoff admitted that he was turning his wealth management operation business into a Ponzi scheme that defrauded thousands of investors of billions of dollars in March 2009. The federal investigators pointed out that Madoff started Ponzi scheme in the 1970s, 10 years later when Bernard L. Madoff Investment Securities LLC was established. Until the date when he was investigated by the federal authorities, stated as almost $65 billion was missing from client accounts, including fabricated gains. In the end of the case, Madoff was sentenced to 150 years in prison, the maximum allowed. His brother, Peter Madoff, was sentenced to 10 years in prison. His son Mark committed suicide by hanging exactly two years after his father’s arrest.
Red flags and Investigation: In the beginning of the Ponzi scheme, he committed to his customers with high returns for their investments. But, according to Madoff, the basic essence of the scheme was that he deposit money into a Chase account, rather than invest money to any legitimate investments, as he admitted during the guilty plea. When customers wanted their money, he just used money