New York – Former chairman of the Nasdaq Stock Market Bernard Madoff who was arrested yesterday and accused of orchestrating a ponzi scheme that bilked some $50 billion out of investors, is the largest ever ponzi scheme.
The founder of Bernard L. Madoff Investment Securities allegedly has been running the scheme for years, using new money coming into the fund to pay returns to other investors, keeping up the façade of an admirable performance. In his alleged confession to the FBI, Madoff took the blame, saying he “paid investors with money that wasn’t there.”
According to the SEC complaint, Madoff informed two senior employees at his firm yesterday that he was “finished,” and that his business is “all just one big lie,” and “basically, a giant Ponzi scheme.” He also allegedly admitted that the firm was insolvent and had been for years.
“We are alleging a massive fraud – both in terms of scope and duration,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement. “We are moving quickly and decisively to stop the fraud and protect remaining assets for investors and we are working closely with the criminal authorities to hold Mr. Madoff accountable.”
Madoff, 70, posted bail at $10 million, backed by his Manhattan apartment and guaranteed by his wife.
“Bernard Madoff is a longstanding leader in the financial services industry,” his lawyer Dan Horwit told reporters outside the Manhattan courtroom. “We will fight to get through this unfortunate set of events.”
Madoff served as Chairman of the Sy Syms business school, a division of Yeshiva University