Bernie Madoff Fraud Allegations: Truly Staggering 28 comments
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The revelations around Bernard Madoff today are staggering. Truly. This is the sort of thing that makes you wonder what is real anymore in markets, and what isn’t.
Bernard Madoff, founder and president of Bernard Madoff Investment Securities, a market-maker for hedge funds and banks, was charged by federal prosecutors in a $50 billion fraud at his advisory business.
Madoff, 70, was arrested today at 8:30 a.m. by the FBI and appeared before U.S. Magistrate Judge Douglas Eaton in Manhattan federal court. Charged in a criminal complaint with a single count of securities fraud, he was granted release on a $10 million bond guaranteed by his wife and secured by his apartment. Madoff’s wife was present in the courtroom.
“It’s all just one big lie,” Madoff told his employees on Dec. 10, according to a statement by prosecutors. The firm, Madoff allegedly said, is “basically, a giant Ponzi scheme.”
• • •
Some snippets from the legal complaints related to the Madoff legal blockbuster. His advisory firm has been alleged to be -- including by his own supposed free admission to an FBI agent and to some senior employees -- a multi-billion dollar Ponzi scheme.
• • •
Lots of chatter about whether $50-billion is really the correct number in the Bernie Madoff fraud allegation debacle. What is the right number? Well, here are some key stats:
- According to a Form ADV filed with the SEC a year ago, Madoff's advisory business then had $17.1-billion in assets
- According to the complaint, senior employees, until recently, thought Madoff's business had assets of $8-$15-billion
- Madoff allegedly told a senior employee in early December that he had $7-billion in redemptions that he was "struggling to obtain the liquidity necessary" to meet
So that's it then, right? We're looking at something like $7-$15- billion in fraud-related losses, depending on actual assets. That's a huge number, of course, but less than the $50-billion headline figure.
Well, hang on. Because according to the complaint, Madoff estimated total losses to be at least $50-billion.
Remember, this is Madoff saying it, not the FBI or the SEC, according to the complaint. The latter, larger figure would mean that the Ponzi element here -- new investors paying out old ones without knowing -- was longer and more significant than the firm simply blowing up in the last three months and then doing dumb things. After all the firm had, according to Madoff, been "[insolvent] for years". To generate $50-billion in losses, assuming the Jan 2008 number was right, and assuming he wasn't seeing huge redemptions, and assuming he wasn't paying himself out of firm assets, he had to have been running some sort of scheme for a long time indeed.
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On Dec 12 03:27 PM cynmark24 wrote:
> secmaven - I am one of those greedy fools, but never was a wealthy
> one. Now, the day I die will be the day I retire. Its pathetically
> sad, and my wife has lost her security blanket. The only thing left
> in our lives that is solid is our 37 year marriage. Can't afford
> anything anymore. Not looking for sympathy here, for its not sympathy
> that could help. Just venting I suppose.I have had money with Madoff
> for nearly 20 years. Now its all gone. Can't sleep at night, or work
> during the day. Truly, while being well divesified you can lose
> money in all your investments, but its very unlikely that any one
> investment going belly-up will leave you at the poor house. That
> was my error. Eggs in the basket? I knew the rules, but greed of
> a 11% return in 2008 kept me in. Good luck everyone.
Dustin Hoffman for the movie??
Scott
When the extremist-capitalist begin to show some empathy I'll revisit their "horrible, devastating reality".
Until then they can choke on their greed!
On Dec 12 04:43 PM User 318499 wrote:
> It's easy to say people deserved to lose their money, and it's heartless.
> People who invested with him for decades trusted him and now, overnight,
> they have nothing. It's a horrible, devastating reality for a lot
> of people today.
While you still have your health, see about somehow getting to the bottom of it (Maddoff with all your savings) and writing a book geared to
school age students and get your grandkids to help you research it.
It would could be an original - one- its- kind- collaboration and told from as many perspectives as possible there must be a publisher that would be interested in it; ideally Scholastic. The sooner you start putting a plan together, the sooner you can approach people that matter to you present it. This is real life education and I can see it touching both the literacy and math components, not to mention the contemporary history and economics all part of the curriculum. In this way an educational publisher like Scholastic might support you especially if your vision has your book being standard fare in high school.
For what its worth.
On Dec 12 03:27 PM cynmark24 wrote:
> secmaven - I am one of those greedy fools, but never was a wealthy
> one. Now, the day I die will be the day I retire. Its pathetically
> sad, and my wife has lost her security blanket. The only thing left
> in our lives that is solid is our 37 year marriage. Can't afford
> anything anymore. Not looking for sympathy here, for its not sympathy
> that could help. Just venting I suppose.I have had money with Madoff
> for nearly 20 years. Now its all gone. Can't sleep at night, or work
> during the day. Truly, while being well divesified you can lose
> money in all your investments, but its very unlikely that any one
> investment going belly-up will leave you at the poor house. That
> was my error. Eggs in the basket? I knew the rules, but greed of
> a 11% return in 2008 kept me in. Good luck everyone.
On Dec 12 04:43 PM lostone wrote:
> It's easy to say people deserved to lose their money, and it's heartless.
> People who invested with him for decades trusted him and now, overnight,
> they have nothing. It's a horrible, devastating reality for a lot
> of people today.
It could be one of the largest fraud schemes in Wall Street history
with $50-billion in losses.
“It’s all just one big lie,”
Madoff told his employees.
The firm, is “basically, a giant Ponzi scheme.”
But didn't anyone, including the SEC,
wonder why this fund wasn't audited by a known firm?
That's why i verify the people before doing any business
You can use any free services to prevent scams
just looking in his public records
I recommend to use ArchiveNational.Com
and you will prevent some frauds
Hope that this helps someone!
ArchiveNationa.Com
HA, we're all suckers as with one charge and being a nice guy he will only get probation.
Start the clock, this entire scandal is being orchestrated to his advantage.
On Dec 12 11:17 AM secmaven wrote:
> The few rich greedy fools who invested with this bum can probably
> well afford the losses. I don't have any sympathy for them.