Bernard L. Madoff Made Off with Everyone’s Money
On November 11, 2008 famed hedge fund manager Bernard L. Madoff was arrested by the FBI for what seems to be the biggest fraud in the history of Wall Street. Madoff is accused of running a Ponzi scheme to the tune of $50 billion. On Wednesday, November 10, 2008 Madoff called his two top executive officers to his Manhattan apartment. In fact his it was his sons who were the two executives called to his apartment. At that time he confessed that his operation was based on a lie.
Madoff had been running a Ponzi scheme apparently for many years. A Ponzi scheme is an investment fraud where dividends are paid to older investors by money received from new investors. In other words, there is no actual pool of money being invested for the benefit of all. Madoff faked documents to show that he was generating returns from the money people were giving him to invest. However, he was not properly investing the money given to him. Madoff simply sought money from other investors to pay supposed dividends. The current financial problems on Wall Street and Main Street have made it impossible for Madoff to continue his scheme. It is said that he has lost $50 billion in investors’ money.
Madoff ran a very secretive operation. It is said that he only sought money from very wealthy families from Long Island to Palm Beach. He even was supposed to be investing and managing money for charitable foundations as well. Madoff continually cooked the books to make his fund look always profitable. For the last 18 years, the Madoff fund seamed to do no wrong. Year after year, with the exception of a few years in between, the Madoff fund always showed 8% to 12% gains, even in bad times. No one ever questioned the former NASDAQ chairman’s financial practices even though Madoff kept his acutal transactions under lock and key where only he had access.
Bernard L. Madoff, born in 1938 Brooklyn New York and rose from humble middle class beginnings to become one of Wall Streets most important figures. In 1960 he founded Bernard L. Madoff Investment Securities. Madoff started his firm with $5000 that he claimed he had made from working as a lifeguard and installing sprinkler systems. The Madoff family was also involved in many philanthropic organizations.
It was his sons who turned their father into the Securities Exchange Commission exposing the biggest fraud ever to hit Wall Street. Madoff did not resist any arrest and was very cordial when the FBI arrived.
How does such a prominent individual stoop to such a level, that he could steal from people? At one time, Madoff boasted on his website how his company was founded on honest and ethical principles. Perhaps, there was a time when Madoff acted as a responsible and ethical individual. However, greed propelled this once powerful Wall Street player into another Wall Street criminal. The most mind boggling fact remains that no one ever questioned Madoff’s investment practices. In regards to greed, the old saying says that pigs get fat while hogs get slaughtered. It must be Madoff’s turn at the slaughter house.
On November 11, 2008 famed hedge fund manager Bernard L. Madoff was arrested by the FBI for what seems to be the biggest fraud in the history of Wall Street. Madoff is accused of running a Ponzi scheme to the tune of $50 billion. On Wednesday, November 10, 2008 Madoff called his two top executive officers to his Manhattan apartment. In fact his it was his sons who were the two executives called to his apartment. At that time he confessed that his operation was based on a lie.
Madoff had been running a Ponzi scheme apparently for many years. A Ponzi scheme is an investment fraud where dividends are paid to older investors by money received from new investors. In other words, there is no actual pool of money being invested for the benefit of all. Madoff faked documents to show that he was generating returns from the money people were giving him to invest. However, he was not properly investing the money given to him. Madoff simply sought money from other investors to pay supposed dividends. The current financial problems on Wall Street and Main Street have made it impossible for Madoff to continue his scheme. It is said that he has lost $50 billion in investors’ money.
Madoff ran a very secretive operation. It is said that he only sought money from very wealthy families from Long Island to Palm Beach. He even was supposed to be investing and managing money for charitable foundations as well. Madoff continually cooked the books to make his fund look always profitable. For the last 18 years, the Madoff fund seamed to do no wrong. Year after year, with the exception of a few years in between, the Madoff fund always showed 8% to 12% gains, even in bad times. No one ever questioned the former NASDAQ chairman’s financial practices even though Madoff kept his acutal transactions under lock and key where only he had access.
Bernard L. Madoff, born in 1938 Brooklyn New York and rose from humble middle class beginnings to become one of Wall Streets most important figures. In 1960 he founded Bernard L. Madoff Investment Securities. Madoff started his firm with $5000 that he claimed he had made from working as a lifeguard and installing sprinkler systems. The Madoff family was also involved in many philanthropic organizations.
It was his sons who turned their father into the Securities Exchange Commission exposing the biggest fraud ever to hit Wall Street. Madoff did not resist any arrest and was very cordial when the FBI arrived.
How does such a prominent individual stoop to such a level, that he could steal from people? At one time, Madoff boasted on his website how his company was founded on honest and ethical principles. Perhaps, there was a time when Madoff acted as a responsible and ethical individual. However, greed propelled this once powerful Wall Street player into another Wall Street criminal. The most mind boggling fact remains that no one ever questioned Madoff’s investment practices. In regards to greed, the old saying says that pigs get fat while hogs get slaughtered. It must be Madoff’s turn at the slaughter house.
Labels: Bernad Madoff, Bernard L. Madoff, Ponzi scheme
Credit Card / Financial news blog post by Todd Holliday at 7:33 PM 