Madoff's Ponzi scheme

Introduction

Lawrence Bernard "Bernie" is a former chairman of the stock exchange NASDAQ, and confessed, the operator of Ponzi scheme that may be "the largest investment fraud in the history of Wall Street."

In March 2009, Madoff, pleaded guilty to 11 crimes, and confessed and transform it into wealth management business into a massive Ponzi scheme that defrauded thousands of investors billions of dollars. Madoff said he began Ponzi scheme in the early 1990's. Nevertheless, federal investigators believe fraud began in 1980, as well as investment operations, can never be legitimate. The amount of missing client accounts, including fabricated benefits was almost $ 65 billion. The court appointed a guardian to assess the actual losses of investors in the $ 18 billion. On June 29, 2009 he was sentenced to 150 years in prison, the maximum allowed(www.digitaljournal.com).

Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on Dec. 11, 2008. The firm is one of the leading market-maker companies on Wall Street, which cost "specialist" firms that execute orders directly against retail brokers.

December 10, 2008, Madoff sons told authorities that their father had just confessed to them that the hand of asset management of his firm massive Ponzi scheme, and quoting his words: she was "one big lie." The next day, FBI agents Madoff arrested and charged with one count of securities fraud. U.S. Securities and Exchange Commission (SEC), previously held a number of investigations into the practice Madoff business since 1992, which critics say have been incompetently handled. Early career

Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on Dec. 11, 2008.

The company started as a trader penny stock with $ 5000 (about $ 35,000 in 2008 dollars), which Madoff, derived from working as a lifeguard and sprinkler installation. His business grew with the help of his father-in-Law, an accountant Saule Alpern, who noted in a circle of friends and their families. Initially, the firm made markets (stock quotes and prices, please) through the Pink Sheets quotation of the National Bureau. In order to compete with firms that are members of the New York Stock Exchange trading on the floor of the exchange, his company began using innovative computer information technology to spread their quotes. After testing the technology that the company has helped develop NASDAQ. The firm operates as a third-market suppliers, companies that bypass the exchange of experts, the direct perpetrator against orders from retail brokers. At one point, Madoff Securities largest market maker on NASDAQ, and in 2008 was the sixth largest market-maker on Wall Street(online.wsj.com).

Madoff was "the first known practitioner" payment for order flow, in which the dealer pays the broker for the right to fulfill customers' orders. This became known as the "legal impact." Some scientists have questioned the ethics of these payments. Madoff argued that these payments will not change the price that the ...