Born in Brooklyn, Bernie Madoff was born April 29, 1938. His parents, Ralph and Sylvia Madoff, owned SEC-closed Gibraltar Securities.
Early Life
Bernie graduated in 1960 from Hofstra University in political science and briefly attended Brooklyn Law School. He married high school sweetheart Ruth in college. Bernie started trading penny stocks with $5,000 from odd jobs in 1960 and founded Bernard L. Madoff Investment Securities LLC.
Notable Achievements
After feeling ostracized from Wall Street’s elite, Madoff became a clever market maker. He was famed for completing small requests that big companies ignored. His brother Peter and he developed automated trading techniques that attracted major banks and enhanced their business. Madoff made $100 million by the late 1980s as Nasdaq chairman in 1990, 1991, and 1993.
Madoff succeeded with his massive Ponzi scheme. The exploited new investors’ money to pay old investors while professing to trade honestly. Too many clients withdrew funds in late 2008, disrupting the program. Madoff confessed to his sons on December 10, 2008, who reported him to police the next day. Madoff’s newest report showed $64.8 billion in customer assets, despite his assurances.
Players
The origins of Madoff’s Ponzi scheme are unknown. His longtime account manager, Frank DiPascali, believes it began before the early 1990s. Madoff said he didn’t need the scheme financially and didn’t know why he started it. Despite his market maker and trading pioneer success, Madoff maintained others encouraged him and his unwillingness to stop. He also called his clients, especially “feeder funds,” greedy and indifferent to unnaturally high profits.
Scheme
Bernie Madoff compensated redemption clients with more money, providing the appearance of high returns. About half of his investors benefited from his exclusive image, which initially turned off clients. Successful investors financed victims. Many NGOs were Madoff’s victims and supplied 10% of his scams, earning him respect.
Investigation
Since 1992, the SEC has intermittently investigated Madoff, frustrating people who believed earlier investigations may have prevented significant damage. Harry Markopolos found the fraud in 1999 and filed charges in 2000, but the SEC ignored him. After Madoff’s 2005 redemption debacle, the SEC requested documents. Critics questioned Madoff’s false papers and SEC response. The 2008 SEC report criticized the case’s management, disciplining eight workers but without firing any.
Punishment
After Bernie Madoff admitted to fraud in December 2008, his sons Mark and Andy reported him to authorities. December 11 saw Madoff’s arrest. Despite multiple coworkers being imprisoned, his son Mark committing suicide two years later, and Andy dying of cancer in 2014, Madoff claimed to act alone
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