The Scandal Of Bernie Madoff

1386 Words Jul 15th, 2015 6 Pages
The Scandal Bernie Madoff was known as a hard worker who, at one point, created the largest buying-and-selling market maker at the NASDAQ from being a mere penny stock trader in the 1960s. He was a stock broker, a financial advisor, and a chairman of the NASDAQ. As of December 11, 2008, he primarily became known for being responsible for the largest Ponzi scheme in history. He was able to make $50 billion disappear as if the money had never existed by using new investors’ money to pay out the old. The Securities and Exchange Commission (SEC) had received tips about Madoff’s business, and paid his office a visit for an investigation. However, even after hours were spent searching through fabricated trading records, the SEC wasn’t able to find anything. In 2005, a fraud was exposed at another hedge fund, Bayou Group. This resulted in investors withdrawing cash from Madoff, leaving him $92 million short with only 3 days to replenish this amount before is fraud was detected, which he was amazingly able to do. Unfortunately for him, in 2008, Madoff faced $7 billion in redemptions, which ultimately resulted in his confession and arrest. Looking back, Robert Lenzer, a contributor to Forbes magazine, stated that “it’s virtually impossible to have returns like Madoff reported, and it should have been a major warning signal.” In March 2009, Madoff pleaded guilty to 11 federal crimes, and in June of that year was sentenced to 150 years in prison.
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