Shock and Disbelief: Bernard Madoff Accused of Defrauding Clients of $50 Billion
Bernard Madoff, the founder of Bernard L. Madoff Investment Securities LLC and a former Nasdaq Stock Market chairman, was arrested and charged with securities fraud in what has beeen called by federal prosecutors as a Ponzi scheme that could involve losses of more than $50 billion.Mark Madoff, who is Bernard Madoff's son and head of listed trading at the firm, is also a member of Wall Street & Technology's Reader Advisory Board. We have contacted Mark Madoff, but we have not heard back from him. Madoff's sons, Mark and Andrew, are senior executives at Bernard L. Madoff Investment Securities. According to the Wall Street Journal (registration required), they are the employees who turned Bernard over to authorities after he revealed the scheme to them earlier this week.
Wall Street & Technology and Advanced Trading have quoted the Madoffs numerous times over the years and they have appeared in many articles, including articles, here, here, here and here. These charges certainly shocked us, as they have shocked many in the industry. For an industry already suffering from a lack of investor confidence, these charges - if they turn out to be true - will further damage the industry's reputation.
Madoff, who is still the head of the firm he founded, apparently ran a separate, somewhat secretive investment advisory business that managed money for high-net-worth individuals, hedge funds and other institutions, according to this Wall Street Journal article.
While all of the circumstances of the alleged fraud are not yet known, there are a number of articles on the topic already, including articles from The New York Times, Marketwatch and probably the most comprehensive article in the Wall Street Journal (registration required), amongst others.
In addition, here are links to the SEC's complaints as well as the federal complaint from the U.S. Attorney's office for the Southern District of New York:
Federal Securities Fraud Charge (PDF)
Federal Securities Fraud Charge press release (PDF)
SEC Complaint press release (Word document)Bernard Madoff, the founder of Bernard L. Madoff Investment Securities LLC and a former Nasdaq Stock Market chairman, was arrested and charged with securities fraud in what has beeen called by federal prosecutors as a Ponzi scheme that could involve losses of more than $50 billion. Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio
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