The term 'Bernard Madoff' is included in the Economics edition of the Financial Dictionary. Get your copy on Amazon in Kindle, Paperback or Audio edition. Check for lowest price here...
Bernard Madoff used to be a nationally famous and admired stock broker and investment advisor. In the end, it turned out that he oversaw a multibillion dollar empire which he ran as an elaborate and far-flung Ponzi scheme. Madoff is presently serving out a 150 year prison sentence for his crimes in this endeavor.
Bernard Madoff was born in Queens, New York in 1938 on April 29th. After earning his Political Science bachelor’s degree from Hofstra University in New York City in 1960, he pooled together $5,000 of his own money with another $50,000 which he borrowed from his wife Ruth’s parents. The couple then founded Bernard L. Madoff Investment Securities, LLC.
Thanks to assistance from his father in law, a retired CPA, Bernard Madoff and his company were successful in attracting in wealthy and famous investors that gave him a prestigious client roster. Among his investor-clients were Steven Spielberg, Kyra Sedgwick, and Kevin Bacon. Word of mouth spread his consistent fame for delivering yearly returns amounting to ten percent or even higher. By the conclusion of the 1980s, the Bernard L. Madoff Investment Securities company handled over five percent of the entire daily trading volume of the NYSE New York Stock Exchange.
Not all of Madoff Securities’ successes were mere mirages. He had been forward thinking in adapting his business to changing technologies and times. His company proved to be among the first to deploy computerized technologies in its trading. In this way, his firm actually became a key player in the rise of the famed NASDAQ stock market exchange, which is actually the National Association of Securities Dealers Automated Quotations. Madoff was such an important part in the NASDAQ operation that he eventually held the NASDAQ Chairmanship for three separate year-long terms.
Bernard Madoff loved to bring in his many family members to the family business. The company grew by leaps and bounds, prompting his younger sibling Peter to come aboard in 1970 as the company’s Chief Compliance Officer. Afterwards, his two sons Mark and Andrew began to work for the firm as traders. Shana, Peter’s daughter worked as rules compliance lawyer of the trading division. Peter’s son Roger worked for the firm until he died in 2006.
It all seemed charmed and too good to ever end for Madoff’s satisfied clients and colleagues. Yet the truth was that Madoff had been hiding a dark secret for over 30 years. On December 10th of 2008, he told his two sons he would award a few million dollars in company bonuses sooner than originally planned. When the two insisted on knowing where these funds would come from, he admitted that he had an arm of his company which actually ran as a massive and complex Ponzi scheme. The two sons went straight to the federal authorities with this information on their father. That next day December 11, 2008 saw the legendary Bernie Madoff arrested by the Feds under charges of securities fraud.
Bernard Madoff confessed to the federal investigators that his firm had actually lost an eye-watering $50 billion in investor money in recent years. March 12th in 2009 was the day he pleaded guilty on 11 different felony charges. These included investment adviser fraud, securities fraud, wire fraud, mail fraud, perjury, false statements, money laundering on three counts, theft from his employee benefit plan, and falsified filings before the U.S. SEC Securities Exchange Commission. He had moved an incredible $170 billion through his main accounts over decades of time. Yet at the time of his arrest, the statements of the firm only showed $65 billion in accounts, most of which had been lost in the markets. The judge sentenced the 71 year old Bernie Madoff to a 150 year long prison sentence without the possibility of parole.