Bernard Madoff

Bernard Lawrence "Bernie" Madoff (IPA: /ˈmeɪdɒf/) (born April 29, 1938, in New York City) was an American businessman, and former chairman of the NASDAQ stock exchange. On March 12, 2009, he admitted[1] to perpetuating the largest investor fraud ever committed by a single person, pleading guilty to federal charges that he had defrauded his investors of almost $65 billion.[2][3] He was jailed immediately after the hearing pending sentencing, which may be up to life in prison, with restitution of up to $170 billion. There was no plea deal with Madoff; he simply pleaded guilty to all charges.[4][5]
He founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on December 11, 2008.[6][7][8] According to the original federal charges, Madoff said that his firm had "liabilities of approximately US$50 billion."[9][10][11] Prosecutors increased their estimate of the size of the fraud from $50 billion to $64.8 billion, based on the amounts in the accounts of Madoff's 4,800 clients in November 30, 2008.[12] However, several people involved in the case and outside observers have said that the actual loss to investors could be far less than that. The actual number is not known at this point, but former SEC Chairman Harvey Pitt estimated the actual fraud at between $10 and $17 billion. This estimate is much lower because it does not include the fictional returns credited to the customer accounts by Madoff.[13]
On December 10, 2008, Madoff told his sons that the asset management arm of his firm was a giant Ponzi scheme—as he put it, "one big lie."[14] They then passed this information to authorities.[9][15][16][17][18] The following day, Federal Bureau of Investigation agents arrested Madoff and charged him with one count of securities fraud. Five days after his arrest, Madoff's assets and those of the firm were frozen and a receiver was appointed to handle the case.[19] Some investors, journalists, and economists have questioned Madoff's statement that he alone is responsible for the large-scale operation, and investigators are looking to determine if there were others involved in the scheme.[20] The SEC has also come under fire for not investigating Madoff more thoroughly; questions about his firm had been raised as early as 1999. Madoff's firm, which is in the process of liquidation, was one of the top market maker businesses on Wall Street (the sixth-largest in 2008),[21] often functioning as a "third-market" provider that bypassed "specialist" firms and directly executed orders over the counter from retail brokers.[22] The firm also had an investment management and advisory division that was the focus of the fraud investigation.[10]
Madoff was also a prominent philanthropist who served on the boards of nonprofit institutions, many of which entrusted his firm with their endowments.[23][24] He is a former National Treasurer of the American Jewish Congress. The freeze of his and his firm's assets have had effects around the world on businesses and charities, some of which, including the Robert I. Lappin Charitable Foundation, the Picower Foundation, and the JEHT Foundation were forced to close as a consequence of the fraud.[23][25][26][27]