The firm functioned as a third market trading provider, bypassing exchange specialist firms by directly executing orders over the counter from retail brokers. After 41 years as a sole proprietorship, the Madoff firm incorporated in 2001 as a limited liability company with Madoff as the sole shareholder. After a trial run, the technology that the firm helped to develop became the National Association of Securities Dealers Automated Quotations Stock Market ( Nasdaq). In order to compete with 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. Initially, the firm made markets ( quoted bid and ask prices) via the National Quotation Bureau's Pink Sheets. Shapiro was one such early customer, investing $100,000. Madoff Investment Securities LLC as a broker-dealer for penny stock with $5,000 (equivalent to $49,000 in 2022) that he earned from working as a lifeguard and irrigation sprinkler installer, and a loan of $50,000 from his father-in-law, accountant Saul Alpern, who referred a circle of friends and their families. Madoff Investment Securities LLC and work for himself. Madoff briefly attended Brooklyn Law School, but left after his first year to found Bernard L. Madoff attended the University of Alabama for one year, where he became a brother of the Tau Chapter of the Sigma Alpha Mu fraternity, then transferred to and graduated from Hofstra University in 1960 with a Bachelor of Arts in political science. Madoff graduated from Far Rockaway High School in 1956. He was the second of three children his siblings are Sondra Weiner and Peter Madoff. Madoff's grandparents were emigrants from Poland, Romania, and Austria. Madoff was born on April 29, 1938, in Queens, New York City, to Sylvia (Muntner) and Ralph Madoff, who was a plumber and stockbroker. On April 14, 2021, he died at the Federal Medical Center, Butner, in North Carolina, from chronic kidney disease. On June 29, 2009, Madoff was sentenced to 150 years in prison, the maximum sentence allowed. The Securities Investor Protection Corporation (SIPC) trustee estimated actual losses to investors of $18 billion, of which $14.418 billion has been recovered and returned, while the search for additional funds continues. The amount missing from client accounts was almost $65 billion, including fabricated gains. Those charged with recovering the missing money believe that the investment operation may never have been legitimate. Madoff said that he began the Ponzi scheme in the early 1990s, but an ex-trader admitted in court to faking records for Madoff since the early 1970s. The Madoff investment scandal defrauded thousands of investors of billions of dollars. On March 12, 2009, Madoff pleaded guilty to 11 federal felonies and admitted to turning his wealth management business into a massive Ponzi scheme. Securities and Exchange Commission (SEC) had previously conducted multiple investigations into his business practices but had not uncovered the massive fraud. The following day, agents from the Federal Bureau of Investigation arrested Madoff and charged him with one count of securities fraud. On December 10, 2008, Madoff's sons Mark and Andrew told authorities that their father had confessed to them that the asset management unit of his firm was a massive Ponzi scheme, and quoted him as saying that it was "one big lie". Andrew died of lymphoma on September 3, 2014. Peter was sentenced to 10 years in prison in 2012, and Mark hanged himself in 2010, exactly two years after his father's arrest. While the stock brokerage part of the business had a public profile, Madoff tried to keep his asset management business low profile and exclusive.Īt the firm, he employed his brother Peter Madoff as senior managing director and chief compliance officer, Peter's daughter Shana Madoff as the firm's rules and compliance officer and attorney, and his now-deceased sons Mark Madoff and Andrew Madoff. That year, the firm was the 6th-largest market maker in S&P 500 stocks. He served as the company's chairman until his arrest on December 11, 2008. Madoff founded a penny stock brokerage in 1960, which eventually grew into Bernard L. Madoff's firm had two basic units: a stock brokerage and an asset management business the Ponzi scheme was centered in the asset management business. He was at one time chairman of the Nasdaq stock exchange. Bernard Lawrence Madoff ( / ˈ m eɪ d ɔː f/ MAY-dawf April 29, 1938 – April 14, 2021) was an American fraudster and financier who was the mastermind of the largest Ponzi scheme in history, worth about $64.8 billion.
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