A former Nasdaq chairman has been arrested for stealing over $50 billion through an elaborate Ponzi scheme run through his private investment fund -- he allegedly ripped off some clients to pay other clients, then recruited (and robbed) new clients to pay off the last round of losers. The Wall Street Journal says he was turned in by his sons.
In a separate criminal complaint, Federal Bureau of Investigation agent Theodore Cacioppi said Mr. Madoff's investment advisory business had "deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars..."
The 70-year-old Mr. Madoff is the founder and primary owner of Bernard L. Madoff Investment Securities LLC. The firm is primarily known for its business in market-making, or serving as the middleman between buyers and sellers of shares. But Mr. Madoff also oversaw an investment-advisory business that managed money for high-net-worth individuals, hedge funds and other institutions...
Both complaints say Mr. Madoff told his sons he believed losses from his fraud exceeded $50 billion. That figure couldn't be confirmed. But such a loss is plausible, had money been flowing in and out for years: At the beginning of 2008, according to the SEC filing, his operation had more than $17 billion under management.
Such a scheme would dwarf past Ponzi schemes. It would also be nearly five times larger than the accounting fraud that drove telecom company WorldCom into bankruptcy proceedings in 2002.
Top Broker Accused of $50 Billion Fraud
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