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Ear to the Ground

Top Broker Busted for $50B ‘Ponzi Scheme’

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Posted on Dec 12, 2008
Madoff
streetinsider.com

Here’s yet another candidate for the expanding collection of Tales from the Dark Side of Wall Street (is there any other side?): The Wall Street Journal reported Friday that Bernard L. Madoff, a top trader for nearly five decades who has served as chairman of the Nasdaq Stock Market, was arrested this week after his sons turned him in for engineering an elaborate “Ponzi scheme” that, the paper notes, could dwarf the financial debacle that toppled WorldCom in 2002.


The Wall Street Journal:

The Securities and Exchange Commission, in a civil complaint, said it was an ongoing $50 billion swindle, and asked a judge to seize the firm and its assets. “Our complaint alleges a stunning fraud that appears to be of epic proportions,” said Andrew M. Calamari, associate director of enforcement in the SEC’s New York office.

In a separate criminal complaint, Federal Bureau of Investigation agent Theodore Cacioppi said Mr. Madoff’s investment advisory business had “deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars.”

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By BCC Meteorites, December 15, 2008 at 1:02 pm Link to this comment

Even though I no longer have any money invested in stocks, bonds, mutual funds, money markets, etc(I found out long ago-in the long run its all quackery), I feel bad for the losers in this bad adventure. Why there is even fake quackery in the political system and educational system as we learned form this link. The more you look the more you find.

http://www.bccmeteorites.com/misconduct-planetary.html

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By Inherit The Wind, December 15, 2008 at 4:54 am Link to this comment

Robert,
You are truly getting demented in your virulent anti-semitism.

Where did the money go? IT’S A PONZI SCHEME!  A PYRAMID PLAN!  The money went to the EARLIEST investors—that’s where it goes.  Read up on Charles Ponzi and the Pyramid.

He got people to invest by promising a big return—20 to 40% on their money. Then he got more investors and paid off the first, then more to pay off the second round, etc, etc till it got too wide to pay off the last GIGANTIC mass of investors and it collapsed.

It’s that fucking simple! 

And that’s why it’s illegal (or used to be until Bush came to power). 

Amway had to completely re-vamp their business because THEY were a pyramid scheme—you don’t sell the cleaning products so much, you sell the selling franchises to the next round of suckers.

Robert, you really need to get off this anti-semitic “everything is a Zionist Plot” sickness.  The guy is a simple crook and only the earliest investors got their money—and that’s why later ones bought in.

Learn what a Ponzi scheme is, and how simple it is, and, of course, why it’s illegal.

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By G.Anderson, December 14, 2008 at 10:06 am Link to this comment

I suppose that if Satan were a businessman, he wouldn’t be able to conduct business on wall street with a red face, horns and a pointy tail.

Instead, he would have extensive plastic surgery, to disguise his features, so that he looked somewhat affable, like a friendly neighbor or volunteer at the local senior center.

Still even a pleasing exterior, for the king of darkeness, might not be enough to hide the evil vibrations, seeping through his pores. So Satan would have to spend hours in front of the mirror each day cultivating a pleasant and modest smile, tucking his pointed tongue well into his mouth…

say cheese Mr. Madoff…

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By samosamo, December 13, 2008 at 6:49 pm Link to this comment

By Robert, December 13 at 4:58 pm

So I call madoff what he really is, a financial terrorist, and you now point to the state of izrael as the recipient of the missing money. Wow!! I can now only suppose that if this is true then izrael is the most dangerous terrorist country to the USA in the world and the USA is its biggest and most favorite private subcontractor. Sort of makes solutions realitively simple to deal with as now we just arrest the country of izrael.
Whatever, this is definitely something that will never get investigated and IF izrael got that money, we may as well print up some more to give them their next payoff.

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By Robert, December 13, 2008 at 5:58 pm Link to this comment

Who is Bernard Madoff?


“It’s all just one big lie.”
- Bernard Madoff to his sons about his $50 billion “Ponzi” scheme


“Fraudster Bernard L. Madoff was national treasurer of the American Jewish Congress and Yeshiva University. So where did the $50 billion go?

The latest massive financial scandal is the giant $50 billion pyramid or “Ponzi” scheme run by a New York Zionist Jew, Bernard Lawrence Madoff. How can anyone lose $50 thousand million? Where did the $50 billion disappear to? Israel?

Madoff told two “senior employees,” i.e. his sons, Mark and Andrew, at his apartment the night before his arrest that the Madoff hedge fund and his investment advisory business was “basically, a giant Ponzi scheme,” according to court documents. His investment fund business was insolvent, and had been for years.

Many of Madoff’s victims were fellow Jews looking for consistent returns on their investment, which his “Ponzi” scheme had been able to provide until a large number of investors tried to withdraw some $7 billion worth of funds in November. As the Wall Street Journal reported:
News of money manager Bernard Madoff’s alleged fraud sent shock waves through upscale communities in the New York area and Florida where wealthy individuals had entrusted billions of dollars to Mr. Madoff for decades. Ira Roth, a New Jersey resident, who says his family has about $1 million invested through Mr. Madoff’s firm, is “in a state of panic.”

“This is going to kill so many people,” said a current investor in Mr. Madoff’s fund. “It’s absolutely awful.”

...Many of his clients knew Mr. Madoff personally but had little understanding of his investment strategy, which reported remarkably consistent returns of some 1% per month. They often referred to it as a “black box.”

Madoff also allegedly said that the losses from the fraud were at least $50 billion, according to the criminal complaint. He told his sons that he was “finished,” and that he had “absolutely nothing” and “it’s all just one big lie.”

WHERE DID THE MONEY GO?

So who is Bernard L. Madoff? Apart from running his “investment company” and being a former chairman and director of the National Association of Securities Dealers (NASDAQ), Madoff is a very committed Jewish Zionist who has served as the treasurer of two leading Zionist organizations. Like Richard Fuld of Lehman Brothers, Sanford Weill of Citibank, and Maurice Greenberg of A.I.G., the major culprits behind the $2 trillion bail-out, Madoff is another New York Zionist Jew who has committed a massive financial fraud and cheated Americans and others out of untold billions of dollars.

From the left: Bernard L. Madoff, Yeshiva University Board treasurer and Board chairman, Syms School; Sy Syms, vice chairman, Board of Trustees; and Josh S. Weston.

Madoff is a former national treasurer of the American Jewish Congress (AJC) of New York City, one of the major fund-raising organizations for the state of Israel. Founded by the Hungarian Zionist rabbi Stephen S. Wise, the AJC claims to be “the first Jewish Defense Agency to support the establishment of a Jewish state” and boycott Germany in the 1930s. Wise was a Zionist who had been trained at the Jewish Theological Seminary in New York City, where Michael Chertoff’s rabbi father and grandfather also studied and taught.

Madoff is also the treasurer of Yeshiva University, a private Jewish university in New York City, where he is chairman of the board of the university’s business school, the Sy Syms School of Business, which he has endowed with large donations, from his “Ponzi” scheme no doubt.”


http://www.wakeupfromyourslumber.com/node/9514

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By samosamo, December 13, 2008 at 2:27 pm Link to this comment

The new poster boy of a financial terrorist. This is the type of person that the ‘war on terror’ is all about. The war on terror is a sham anyway but it does include a definition of ‘anyone posing a threat to the economic security of the United States of America. And he isn’t the only one but certainly the main man in the spotlight right now. Plus, he is out on bail now so watch your back, uh, money.
I still find news at msnbc and here is the current link to this unfolding story:

http://www.msnbc.msn.com/id/28204628/

This guy should have never been released at all as his shtick will most likely be just one of the major barriers to any kind of economic recovery that can be made. And yet, because his criminality involves money, it will just be over looked and probably one of the last corporate welfare give aways w’s administration will contrive to dole out to the very people that created this disaster instead of helping those that lost their investments through his totally criminal actions.
And any oversight on others in this game? Not a chance, that denotes regulation and being ‘fettered’ and thus unable to continue with those still uncovered ‘ponzi’ schemes.

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By felicity, December 13, 2008 at 12:33 pm Link to this comment

Utter greed did a lot of Madoff’s investors in - not a few of whom are mega-rich.  If you’re promised as much as 50 percent profit on investments, which Madoff did in some cases, you’ve got to know that they’re ill-gotten gains - read something’s illegal somewhere.  And if it pans out, you’ve got to know that your exorbitant profit meant someone else got screwed.

The financial shenanigans on the Street may start at the top, but people like Madoff don’t and can’t operate in a vacuum.

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By dick, December 13, 2008 at 11:11 am Link to this comment
(Unregistered commenter)

Now Madoff; before Greenberg, Greenspan,Rubin,  Paulson, Bernanke, Ebers, Lay,etc. All of insatiable greed and no ethics or honesty.

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By thebeerdoctor, December 13, 2008 at 10:07 am Link to this comment

Bernie Madoff is just the latest manifestation of the boundless rotten manipulations executed by the ruthlessly clever. A Board of Trustees member of Yeshiva University, how can anyone with a straight face claim that his business practices are righteous? A market maker that leaves you nothing but worthless paper.
Unfortunate events, his attorney will claim, unfortunate indeed.

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By P. T., December 13, 2008 at 9:27 am Link to this comment

I can’t see handing your money over to a guy who won’t give you any clue how he is investing it.  That doesn’t seem too smart.

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By Purple Girl, December 13, 2008 at 7:21 am Link to this comment

This guy sounded like The Don Juan of Wall Street, who were his admirers, his groupies, those who dreamed (and schemed) to emulate him?so now we know who stole 50 billion which the TARP was meant to conceal. Now let’s find the Others who No doubt were privvy to his methods, or using his methods as a guide to ‘big money ’ investing.
We know those who play on wall street are easily conned by shiny objects and ‘Group think’. apparently none have any common sense, or Ethics, so knowing there are many more Madoff’s to be prosecuted is a No brainer.

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By hippy pam, December 13, 2008 at 6:34 am Link to this comment

“made-off” should be stripped of ALL ASSETS-those assets should be GIVEN TO THE PEOPLE HE DEFRAUDED- HE SHOULD BE TRIED AND COVICTED OF FRAUD-Then STAND HIM AGAINST A WAll AND SHOOT HIM!!!!!!

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By jaja, December 13, 2008 at 2:28 am Link to this comment
(Unregistered commenter)

wall street may not be the anti-christ, but it’s pretty damned close…to piggybank on bob grant’s comments about Illinois politics.

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By Robert, December 12, 2008 at 9:24 pm Link to this comment

Madoff Turned in by Sons After Confessing $50 Billion Fraud

By David Voreacos and David Glovin

“Dec. 12 (Bloomberg)—Bernard Madoff’s sons turned him in to U.S. authorities after he confessed to them that his investment advisory business was “a giant Ponzi scheme” that cost clients $50 billion, a lawyer for the brothers said.

Mark and Andrew Madoff contacted authorities on the evening of Dec. 10 after their father admitted a fraud that led to his arrest yesterday by the FBI in Manhattan, according to a statement today by attorney Martin Flumenbaum, their lawyer. The brothers, who worked for their father, had no prior knowledge of the fraud, Flumenbaum said.

“Mark and Andrew Madoff are not involved in the firm’s asset management business, and neither had any knowledge of the fraud before their father informed them of it on Wednesday,” said the statement by Flumenbaum of Paul, Weiss,Rifkind, Wharton & Garrison in New York.

“They were shocked to learn of his actions and contacted the authorities immediately upon being told that he had been defrauding the firm’s clients,” it said. “The brothers were among the many victims of this scheme and will continue to cooperate fully” with prosecutors at the U.S. Attorney’s Office and regulators at the Securities and Exchange Commission.

Madoff was charged yesterday with securities fraud, and the SEC filed a civil lawsuit against him and his firm. He appeared yesterday in federal court in New York and is free on bail after posting a $10 million bond yesterday secured by his Manhattan apartment and guaranteed by his wife.

The case is U.S. v. Madoff, 08-MAG-02735, U.S. District Court for the Southern District of New York (Manhattan).”

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDekXqQt6w7o&refer=home

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By msgmi, December 12, 2008 at 7:36 pm Link to this comment
(Unregistered commenter)

Madoff Ponzi will get a slap on the wrist for defrauding his clients. Where was the SEC when complaints were brought forth against Madoff. SEC Chairman Cox has been out to lunch for too long. He deserves to be implicated in this Ponzi caper as an enabler and he should be dismissed for his incompetence.

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By nrobi, December 12, 2008 at 4:47 pm Link to this comment

In the article, Mr. Madoff, states that the whole idea of Wall Street and the Stock Market are nothing more than a “ponzi scheme,” from the get go!
Why do the American people invest their money in what can only be termed “ponzi schemes,” while the richest in our land, take their money to other countries that have no tax laws and reap the benefits of tax free money?
America, the “Alice-in-Wonderland,” country where everything is topsy-turvy, and the rich get richer on the backs of the working class and the poor get what the rich want them to, zip, nada, zilch, zero, and of course bupkus!
*****************************************************
All of the funds that the %1 control come from the pockets of the working class and they misuse these funds to their own benefit and screw the workers, when they ship the jobs overseas, without any severance packages for the workers who made the companies what they are, while the executives of these same companies get paid bonuses because the companies are losing money hand over fist.
Should the American people wake up and demand their rights, I will be surprised. No one of us can make the changes necessary, but if enough of us band together, we can cause a shake-up of the highest magnitude and change the system for the better.
Men and women like Mr. Madoff, are only able to do these crimes in an environment like this because there is no oversight of the economic sector and the people who work in it.

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