Madoff Charged With Securities Fraud

[alcibiades_mystery]

Source: Wall Street Journal Online

Bernard L. Madoff, the founder of Bernard L. Madoff Investment Securities and a fixture of the Wall Street trading world for decades, was arrested Thursday morning by Federal Bureau of Investigation agents and charged with criminal securities fraud by federal prosecutors in Manhattan.

The criminal complaint filed against Mr. Madoff alleges that he told senior employees Wednesday that his business was "a giant Ponzi scheme," according to a person familiar with the matter. The alleged scheme involved tens of billions of dollars, but the extent of investor losses wasn't immediately clear.

---snip---

Read more: http://online.wsj.com/article/SB122903010173099377.html

---

The whole firm is likely finished now.

[TomInTib]

1. Wow! That firm was bedrock.

Or seemed to be anyway.

What if our entire economy is based around a few huge schemes such as this?

Is that why Goldman-Sachs execs continue to be appointed to sensitive positions?

[Tansy_Gold]

6. Our entire economy isn't a ponzi scheme yet, but the stock markets

and other "investment vehicles" almost certainly are.


Come over to the stock market watch thread. We discuss this on a daily basis.




Tansy Gold

[TomInTib]

9. I am not nearly smart enough to discuss Market Issues.

I have never been able to fully understand how the Machine works.

But I can play a wicked slide guitar.

[catnhatnh]

12. I've often wondered two things....

to which chord is a slide guitar tuned,and is the tuning chord changed depending on the song?

[TomInTib]

13. It depends.

Personally, I prefer to play in an Open G Tuning (DGDGBD), because I like the intonations and it fits my voice. I always use G with acoustic guitar.

For electric and boogie, I sometimes use Open D (DADF#AD).

Some folks simply play in Standard Tuning, but I pretty much stay away from that (requires too much concentration and planning ahead).

Do you enjoy fun slide blues?

Tom

[catnhatnh]

23. Nah, I'm hopeless

When I see it done in Blues stuff I wonder if it's like a half fret stop or blend or a weird B Flat bar thing going on. Mostly I sing a three chord drunken thing at night and stumble on the fourth chord. My question is more about IF you tune to a chord, can you go to a seventh or minor by biasing the glass...thats what I've wondered.

[TomInTib]

24. I see.

To reach a 7th is easy. you just go to the open chord and move the slide, (I use both glass, sterling, brass, and bone) up three frets on the first string (in G).

For minors, I finger behind the slide. But that is not easy, you have to have really long fingers.

The reason I asked if you enjoy that kind of music is not if you play it, but if you like it. I could send you one cool CD.

Tom

[catnhatnh]

47. Tom...sorry I missed this last night.

If you're on that bad boy the answer is yes indeed. Please pm me with details and costs and we'll get it going...

[dixiegrrrrl]

22. Bingo !!!!!! You got it.

But be vewy vewy quiet about this...it's supposed to be a huge secret.

[Baby Snooks]

2. One down, how many more to go?

They ought to arrest them all. Including Chelsea Clinton.

[amdezurik]

4. talk about a knee-jerk reaction...

[Baby Snooks]

8. Please...

It has been a free-for-all and grab-what-you-can on Wall Street for some time. And still is. The traders and the hedge funds are actually making money off the collapse. They are all unethical. But they are all convinced ethics doesn't matter. Only the law matters. And so far most have skirted the arm of the law. They are all sharks feeding off the American people. And that includes Chelsea Clinton. Sorry but she decided to go to work for a hedge fund. Obviously not out of a sense of public service.

[amdezurik]

3. rupert will not see one dime from em

so i can;t read the rest of this, but from the snippet there he supposedly told someone it was a Ponzi scheme...uh, any actual evidence or just the unsupported word of a soon to be laid-off emplyee?

[Robbien]

5. "told employees he had a couple of hundred million dollars left and wanted to distribute it before

turning himself in." Well, appears the employees beat him to the punch.

"Madoff oversaw money for high net-worth individuals, hedge funds and other institutions"

Other institutions probably being pension funds. :(

[amdezurik]

11. that must be in the pay for play part

that should have been in th OP :)

[Turbineguy]

7. A Ponzi Scheme???

so he was arrested for telling the truth.

[Robbien]

14. Well, there is that small matter of the missing twenty bil

Hard to imagine the scene of the boss wandering around the office trying to give away two hundred mil in bonuses saying come and get it before the cops do.

[bertman]

10. Go to this link to get an in-depth explanation of the Ponzi Scheme by an insider:

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom

Long read but very enlightening. Some of you market afficionados may know this stuff, but for me it was revelatory.

What struck me was how few in the financial industry had an idea how all of this worked--or rather didn't work.

[Ichingcarpenter]

15. Investment adviser and former chairman of NASDAQ Stock Market arrested for multibillion dollar Ponzi

Source: US Attorney's Office Southern District of New York

LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, and MARK J. MERSHON, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation ("FBI"), announced that BERNARD L. MADOFF -- the founder of Bernard L. Madoff Investment Securities LLC, a registered investment adviser, and former Chairman of the NASDAQ Stock Market -- was arrested today and charged with one count of securities fraud. According to the Complaint filed in Manhattan federal court:

BERNARD L. MADOFF is the founder of Bernard L. Madoff Investment Securities LLC (the "Firm"), a securities broker dealer with its principal office in New York City. According to the Firm's website, the Firm: (a) "is a leading international market maker. The firm has been providing quality executions for broker-dealers, banks and financial institutions since its inception in 1960"; (b) "ith more than $700 million in firm capital, Madoff currently ranks among the top 1% of US Securities firms; and (c) "Clients know that Bernard Madoff has a personal interest in maintaining an unblemished record of value, fair-dealing, and high ethical standards that has always been the firm's hallmark."

According to two senior employees of the Firm (the "Senior Employees"), MADOFF conducts certain investment advisory business for clients that is separate from the firm's proprietar trading and market making activities. According to the Senior Employees, MADOFF ran his investment adviser business from a separate floor in the New York offices of Bernard L. Madoff Investment Securities LLC. According to a Senior Employee, MADOFF kept the financial statements for the firm under lock and key, and MADOFF was "cryptic" about the firm's investment advisory business.

According to a document filed by MADOFF with the United States Securities and Exchange Commission ("SEC") on January 7, 2008, MADOFF's investment advisory business served between 11 and 25 clients and had a total of approximately $17.1 billion in assets under management.

Read more: http://www.bnonews.com/news/32.html

---

The criminal complaint filed against Mr. Madoff alleges that he told senior employees Wednesday that his business was "a giant Ponzi scheme," according to a person familiar with the matter. The alleged scheme involved tens of billions of dollars, but the extent of investor losses wasn't immediately clear.
I found more here:



The disclosure came after Mr. Madoff tried to distribute early bonuses to employees of his firm, prompting questions by senior employees, a person familiar with the situation said.

Mr. Madoff, 70 years old, allegedly told employees he had a couple of hundred million dollars left and wanted to distribute it before turning himself in to authorities, this person said.

The Securities and Exchange Commission is expected to file parallel civil charges against Mr. Madoff.

The alleged scheme apparently involved an asset-management unit of Madoff Securities. The New York firm is primarily known for its business of market-making in stocks. The asset-management group at Madoff oversaw money for high net-worth individuals, hedge funds and other institutions, according to another person familiar with the matter.

http://online.wsj.com/article/SB122903010173099377.html?mod=googlenews_wsj

[newscott]

16. Holy crap. Reallll Nicccce.

[ben_meyers]

17. Once again the Bush DOJ strikes down another of it's enemies.

The message is don't be contributing to the Democrats. I'm sure he will be exonerated by the new administration.

http://www.newsmeat.com/fec/bystate_detail.php?st=NY&last=Madoff&first=Bernard

[Ichingcarpenter]

21. Seems he gave to Schumer and other DLC democrats but not very much

Considering he's a billionaire.

Most are relative small donations over the years of $500 to $1000


http://www.newsmeat.com/fec/bystate_detail.php?last=Madoff&first=Mark


However he paid lobbying firms more: $30,000 in one year,
http://www.opensecrets.org/lobby/clientsum.php?year=2008&lname=Bernard+L+Madoff+Investment+Securities


Don't know much about this guy

[SOS]

41. Madoff was charged by the SEC and the FBI

The SEC is an independent agency. The FBI is pursuing the criminal aspect, the SEC is pursuing the civil aspect.
Madoff's own sons turned him in! This is hardly political payback, as in the other cases Bush DOJ malfeasance.

You really think the Obama Administration would expend one ounce of political capital to "exonerate" this crook?

[Dreamer Tatum]

42. Translation: "Oh, shit. He gave to Democrats. That must mean HE'S a Democrat, so..."

"...he MUST be as pure and innocent as the driven snow. Why, why, why...he's being PERSECUTED!
Yeah, that's the ticket! We need to start a legal defense fund NOW!"

I wish you had to donate $5 to the homeless for every Newsmeat search.

And just to level-set: SHOULDN'T A GUY LIKE THIS BE AN EMEMY OF ANY ADMINISTRATION?

[Robbien]

18. Conde Nast sums this up nicely

Stupid Crimes of the Week

This week, we've seen three examples well-known, successful professionals being charged with committing absolutely mind-bogglingly stupid crimes.

Rich white men throwing it all away for nothing. It's officially a trend.

First, we witnessed the New York lawyer Marc Dreier being arrested after impersonating another lawyer in what has to be one of the most bizarre and fascinating fraud cases in recent history. Charged with swindling hedge funds out of hundreds of millions of dollars, Dreier was denied bail on Thursday after prosecutors called him "an enormous risk of flight."

Then we had Chicago. Oh, Chicago, your corrupt politicians never cease to captivate the country! Governor Rod Blagojevich was charged with brazenly soliciting bribes in his quest to fill the Senate seat vacated by President-elect Barack Obama.

And now, we have Bernie Madoff. The president of Bernard L. Madoff Investment Securities, the 70-year-old Wall Street trader was arrested by the F.B.I. and charged with securities fraud late Thursday. The fraud allegedly totaled over $20 billion. The details are still emerging, but the Wall Street Journal's description fits the week's crazy criminal trend perfectly. . . When the boss comes in and says "Take your bonus now before the Feds get it instead," you know something is amiss.

. . .

While the lawyers at Dreier L.P. are deciding whether or not to bother coming into work anymore, and the employees in the Illinois capitol hang their heads in shame, the traders at Madoff are now facing an especially ugly holiday season.

[brentspeak]

19. dupe

[olddad56]

20. ISn't the stock market and the banking industry all a big Ponzi scheme?

[SharonAnn]

25. Yes, just like Enron was. And the S&L crisis. Amasingly, the same people caused it.

[truthisfreedom]

26. Please show us a list of those people.

[OhioChick]

27. Ex-Nasdaq chair arrested on fraud charge in NYC

Source: AP

Thursday December 11, 11:19 pm ET
By Larry Neumeister, Associated Press Writer

Ex-Nasdaq chair arrested on securities fraud charge in NYC; accused of $50B 'Ponzi scheme'

NEW YORK (AP) -- A former Nasdaq stock market chairman was arrested on a securities fraud charge Thursday, accused of running a fraudulent investment business that lost at least $50 billion before he confessed to senior employees it was a "giant Ponzi scheme," authorities said.

Bernard L. Madoff, his silver hair reflecting the lights of a federal courtroom, was released on $10 million bail secured by his signature and that of his wife. He declined to comment as he walked out of U.S. District Court in Manhattan.

Madoff, 70, the founder of Bernard L. Madoff Investment Securities LLC, maintained a separate and secretive investment-advising business that served between 11 and 25 clients and had a total of about $17.1 billion in assets under management, prosecutors said.

Late Thursday, the Securities and Exchange Commission announced a civil securities fraud charge against Madoff and said it was seeking emergency relief for investors, including an asset freeze and the appointment of a receiver for the firm.

Andrew M. Calamari, associate director of enforcement in the SEC's New York office, said the SEC was alleging "a stunning fraud that appears to be of epic proportions."



Read more: http://biz.yahoo.com/ap/081211/wall_street_arrest.html?.v=11

[xchrom]

28. ...

:rofl:

[girl gone mad]

29. It looks like he had about 20 clients..

hedge funds, and they all lost everything.

[Baby Snooks]

32. Wonder which ones...

Hopefully the Clintons put all their money in the hedge fund their daughter manages and it in turn was managed by this creep.

Bill Clinton brought all of this on by signing the legislation of Phil Gramm's that turned Wall Street into a Las Vegas casino.

[Hekate]

30. Is the whole economy at that level collapsing like a house of cards?

Just asking. It's all so bizarre.

Hekate

[acmavm]

31. The entire economy is nothing more that a giant Ponzi scheme. Reagan

set it up, bush** & Co. perfected the system. But that everything good and holy that this 70-year old bastard and his wife can 'sign' for a 10 million dollar bond while the rest of us are wondering how we pay next month's heat bill. That is, if we have a place that we can stay and be warm.

[Baby Snooks]

34. Don't forget Clinton...

http://www.commondreams.org/view/2008/12/10-1

[acmavm]

39. Clinton was great on the economy. He was the kiss of death to

the American middle and lower classes. Between CAFTA and 'welfare reform'.

Seriously, I never forget Bill Clinton. Unlike some, I want him so far away from Washington that he's just a memory.

[lonestarnot]

33. Were they able to grab all of his money?

[Myrina]

35. I am speechless ...

... can we please have our $700B back now? And fire Hank Paulson and all his cronies? Please?

[bertman]

36. Here's an article that helps explain what happened on Wall Street -- in lay terms:

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom

Appropriately enough it's titled "The End".

[Baby Snooks]

38. Too bad Sidney Sheldon isn't around...

If Sidney Sheldon was alive, he could write a sequel to the Moneychangers and title it the Market Manipulators.

[Karenina]

40. Highly recommended!

I've kept my ESL classes busy with it. They're ALL showing up to class! :evilgrin:

[Joanne98]

46. MUST READ!

[DemoTex]

37. " .. his silver hair reflecting the lights of a federal courtroom .."

Hozomeen, Hozomeen; most beautiful shock-o-silver I ever seen! (Apologies to Kerouac)

And a $10-million signature bail secured, no doubt, by purloined asserts? WTF? Just WTfuckingF? What do you have to do to go to jail in this country? Don't answer that. I'm already enough depressed.

:wtf:

[jody]

43. In many ways our financial market is one big Ponzi scheme and We the People are the suckers. n/t

[Gin]

44. here is a dumb question.

disregard...

[LeftHander]

45. $50 BILLION.....

That is it....game over...