Bernard Madoff is a former stock broker, investment advisor, etc. He pleaded guilty in March 2009 to 11 felonies and admits that he turned his wealthy management business into a massive ponzi scheme that defrauded thousand of wealthy investors out of billions of dollars. He began this scheme in the early 1990’s. The funds missing from the investors accounts include gains totaling almost $65 billion that was fabricated by Madoff. Madoff reached an agreement on February 2009 with the SEC, banning him from the Securities industry for life.
In 1960 Bernard Madoff was the founder of the small Wall Street firm
Bernard L. Madoff Investment Securities LLC. The firm started as a penny stock trader with $ 5000 that Madoff earned as a lifeguard and a sprinkler installer. His firms grow to be the sixth largest market maker with the help of his father-in-law, accountant Saul Alpern. Alpern referred his friends and their families to the business. For Madoff’s firm to compete with the other firms that were members of the New York Stock Exchange trading on the stock exchange’s floor, his firm began using innovative computer information technology to disseminate its quotes.
Madoff was considered to be “the first prominent practitioner” of the order flow, in which a dealer pays a broker for rights to execute a investor’s orders. This has been a “legal kickback”. Some individuals have questioned the ethics of these payments. Madoff has said that these payments did not change the price that the investor received. He saw the payments as a normal business practice.
On December 10, 2008, Madoff’s sons told authorities that their father had just confessed to them that the asset management arm of his firm was a big scheme. The next day the FBI agents arrested Madoff and charged him with one count of securities fraud. In the early 1980’s the U.S. Securities and Exchange Commission (SEC) has done an investigation into Madoff’s business...
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