How On The Madoff Scandal

2067 Words Nov 6th, 2014 9 Pages
How to Steal Billions – Details on the Madoff Scandal

The Bernard Madoff scandal is a well-known instance of fraud. In fact, it is the largest stock fraud case, the largest ponzi scheme, and the largest international fraud case in history. Mr. Madoff’s scheme totaled just under 65 billion dollars over 35 years. He stole from his friends, community members, celebrities, and even royalty. Elmore Leonard, a popular novelist and screenwriter, said “Psychopaths [are] people who know the differences between right and wrong, but don 't give a shit.” I believe that Mr. Madoff is such a person. How he was able to remain undiscovered for such a long period of time is truly a marvel. Mr. Madoff’s story seems to come straight from the screens of
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Soon, Mr. Madoff acquired more and more of these feeder firms. Avellino and Bienes had opened a secondary agency in Florida opening a new demographic of investors. By the year 1990, Mr Madoff was secretly advising over three thousand clients. The SEC requires everyone advising over 15 people to be licensed. It wasn’t before long that someone turned him in. The SEC launched an investigation on Avellino and Bienes in 1992 under suspicion of a ponzi scheme. Mr. Madoff made the firm Avellino and Bienes hire an attorney by the name of Ira Sorkin. Ira was the former director of the SEC’s New York Office. It’s never been confirmed, but there is a strong conflict of interest here that leads some people to believe that some sort of illegal action took place to make the SEC back off. Unfortunately, Ira’s actions did not work. The SEC shut down Avellino and Bienes investment firm slapping fines on the company and making them pay back all investments.

This was a minuscule bump in the road for Mr. Madoff. By this time, he had helped start the NASDAQ and was currently serving as the chairman. Also, his market matching firm was growing considerably large. This made the SEC not even look twice at Mr. Madoff as he comes forward as an investment advisor. When Avellino and Bienes got shut down, they urged their clients to go with Mr. Madoff or other of his feeders. Now he is out in the open with thousands of clients and is not licensed to be an advisor. At this point,

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