Bernie Madoff $50 billion fraud
Discussion
Couldn't see this up here already
http://www.telegraph.co.uk/finance/financetopics/f...
[quote]
Celebrated Wall Street trader arrested over $50bn con
Bernie Madoff, a former chairman of the NASDAQ stock exchange has been accused of potentially the biggest fraud in corporate history.
By Tom Leonard and James Quinn in New York
Last Updated: 6:56PM GMT 12 Dec 2008
Bernie Madoff, former chairman of the NASDAQ stock market
Even by the standards of New York's recent financial turmoil, the charges levelled at Bernard Madoff are eye-watering – a $50 billion (£33.5 billion) swindle perpetrated by one of the most celebrated traders on Wall Street.
Mr Madoff, 70, a former chairman of the NASDAQ stock exchange and a supposed pillar of the financial community, has been accused of defrauding hedge funds of billions with a fake investment scheme called a 'Ponzi'.
In the fraud outlined by the government, Mr Madoff allegedly promised huge returns to early investors in his asset management business, only to lose their money on the markets. He then paid them back with money put in by later investors, rather than from revenues generated by any real share trading, prosecutors claim.
The news has rocked the hedge fund world as investors faced losing all their money in a scam that, if confirmed, would have what one expert described as a "monumental impact" on the $1.6 trillion (£1 trillion) industry.
Prosecutors say Mr Madoff ran his fraudulent operation for years secretly from a separate floor of the Manhattan offices of his trading firm, Bernard L Madoff Investment Securities, keeping its financial statements "under lock and key".
They believe his scheme unravelled earlier this month after clients – who include hedge funds, banks and wealthy individuals – wanted to redeem some $7 billion (£4.7 billion) and Mr Madoff realised he could not find the money.
In a criminal complaint filed by the FBI and the US Attorney's office, Mr Madoff allegedly told colleagues earlier this week that his investment advisory business was "all just one big lie" and that his firm was "basically, a giant Ponzi scheme".
He said he was "finished" and resigned to going to prison, say prosecutors who arrested him on Thursday after – according to the Wall Street Journal – he was turned in by his two grown-up sons.
Mr Madoff has been charged with a single count of securities fraud and faces up to five years in prison and a fine of up to $5 million (£3.3 million).
He also faces a separate civil lawsuit filed by the US Securities and Exchange Commission which accuses him of defrauding his clients in an ongoing $50 billion (£33.5 billion) fraud.
"Our complaint alleges a stunning fraud that appears to be of epic proportions," said Andrew Calamari, the associate director of enforcement at the SEC's New York office.
According to the SEC's complaint, Mr Madoff told an FBI agent there was "no innocent explanation" and that it was his fault that he had "paid investors with money that wasn't there".
Mr Madoff has been released on $10 million (£7 million) bail, said his lawyers.
"Bernie Madoff is a long-standing leader in the financial services industry. He will fight to get through this unfortunate set of events," said Daniel Horwitz, one of his lawyers.
Christopher Miller, chief executive of Allenbridge Hedgeinfo, a hedge fund ratings agency in London, told the Wall Street Journal that "some very big investor names are involved in this" and said it would have a "monumental impact for the hedge fund industry".
He blamed the "credulousness" of investors who failed to question how they got such big returns on their investments and predicted the case – if proved – was likely to lead to tighter regulation.
Mr Madoff founded the investment firm that stills bears his name in 1960 with $5,000 (£3,000) he earned working as a beach lifeguard on Long Island.
Joined later by his brother, Peter, they took advantage of American moves to increase stock market competition and built their firm into a business that last month was managing some $17 billion (£11 billion) in assets.
The firm's website boasts how clients know that Mr Madoff "has a personal interest in maintaining an unblemished record of value, fair dealing and high ethical standards".
Madoff Securities International Ltd, a London-based business in which Mr Madoff was a major shareholder, stressed yesterday that its business activities were not involved with the American asset management firm under investigation.
[/quote]
ETA original text
http://www.telegraph.co.uk/finance/financetopics/f...
[quote]
Celebrated Wall Street trader arrested over $50bn con
Bernie Madoff, a former chairman of the NASDAQ stock exchange has been accused of potentially the biggest fraud in corporate history.
By Tom Leonard and James Quinn in New York
Last Updated: 6:56PM GMT 12 Dec 2008
Bernie Madoff, former chairman of the NASDAQ stock market
Even by the standards of New York's recent financial turmoil, the charges levelled at Bernard Madoff are eye-watering – a $50 billion (£33.5 billion) swindle perpetrated by one of the most celebrated traders on Wall Street.
Mr Madoff, 70, a former chairman of the NASDAQ stock exchange and a supposed pillar of the financial community, has been accused of defrauding hedge funds of billions with a fake investment scheme called a 'Ponzi'.
In the fraud outlined by the government, Mr Madoff allegedly promised huge returns to early investors in his asset management business, only to lose their money on the markets. He then paid them back with money put in by later investors, rather than from revenues generated by any real share trading, prosecutors claim.
The news has rocked the hedge fund world as investors faced losing all their money in a scam that, if confirmed, would have what one expert described as a "monumental impact" on the $1.6 trillion (£1 trillion) industry.
Prosecutors say Mr Madoff ran his fraudulent operation for years secretly from a separate floor of the Manhattan offices of his trading firm, Bernard L Madoff Investment Securities, keeping its financial statements "under lock and key".
They believe his scheme unravelled earlier this month after clients – who include hedge funds, banks and wealthy individuals – wanted to redeem some $7 billion (£4.7 billion) and Mr Madoff realised he could not find the money.
In a criminal complaint filed by the FBI and the US Attorney's office, Mr Madoff allegedly told colleagues earlier this week that his investment advisory business was "all just one big lie" and that his firm was "basically, a giant Ponzi scheme".
He said he was "finished" and resigned to going to prison, say prosecutors who arrested him on Thursday after – according to the Wall Street Journal – he was turned in by his two grown-up sons.
Mr Madoff has been charged with a single count of securities fraud and faces up to five years in prison and a fine of up to $5 million (£3.3 million).
He also faces a separate civil lawsuit filed by the US Securities and Exchange Commission which accuses him of defrauding his clients in an ongoing $50 billion (£33.5 billion) fraud.
"Our complaint alleges a stunning fraud that appears to be of epic proportions," said Andrew Calamari, the associate director of enforcement at the SEC's New York office.
According to the SEC's complaint, Mr Madoff told an FBI agent there was "no innocent explanation" and that it was his fault that he had "paid investors with money that wasn't there".
Mr Madoff has been released on $10 million (£7 million) bail, said his lawyers.
"Bernie Madoff is a long-standing leader in the financial services industry. He will fight to get through this unfortunate set of events," said Daniel Horwitz, one of his lawyers.
Christopher Miller, chief executive of Allenbridge Hedgeinfo, a hedge fund ratings agency in London, told the Wall Street Journal that "some very big investor names are involved in this" and said it would have a "monumental impact for the hedge fund industry".
He blamed the "credulousness" of investors who failed to question how they got such big returns on their investments and predicted the case – if proved – was likely to lead to tighter regulation.
Mr Madoff founded the investment firm that stills bears his name in 1960 with $5,000 (£3,000) he earned working as a beach lifeguard on Long Island.
Joined later by his brother, Peter, they took advantage of American moves to increase stock market competition and built their firm into a business that last month was managing some $17 billion (£11 billion) in assets.
The firm's website boasts how clients know that Mr Madoff "has a personal interest in maintaining an unblemished record of value, fair dealing and high ethical standards".
Madoff Securities International Ltd, a London-based business in which Mr Madoff was a major shareholder, stressed yesterday that its business activities were not involved with the American asset management firm under investigation.
[/quote]
ETA original text
Edited by digger_R on Saturday 13th December 10:13
bulls
t from his/their website...
The Owner's Name is on the Door
"In an era of faceless organizations owned by other equally faceless organizations, Bernard L. Madoff Investment Securities LLC harks back to an earlier era in the financial world: The owner's name is on the door. Clients know that Bernard Madoff 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. "
t from his/their website...The Owner's Name is on the Door
"In an era of faceless organizations owned by other equally faceless organizations, Bernard L. Madoff Investment Securities LLC harks back to an earlier era in the financial world: The owner's name is on the door. Clients know that Bernard Madoff 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. "
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