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Thread: Madoff Charged in $50 Billion Fraud at Advisory Firm

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    Madoff Charged in $50 Billion Fraud at Advisory Firm

    Source [Bloomberg | Madoff Charged in $50 Billion Fraud at Advisory Firm]

    Bernard Madoff, founder and president of a New York firm that invested funds for wealthy individuals, hedge funds and other institutions, was charged with operating what he told employees was a long-running $50 billion Ponzi scheme in what may be one of the largest frauds in history.

    [...]

    “It’s all just one big lie,” Madoff told his employees on Dec. 10, according to the government. The firm, Madoff allegedly said to them, is “basically, a giant Ponzi scheme.”

    Madoff faces as much as 20 years in prison and a $5 million fine if convicted. His New York-based firm was the 23rd largest market maker on Nasdaq in October, handling a daily average of about 50 million shares a day, exchange data show. It specialized in handling orders from online brokers in some of the largest U.S. companies, including General Electric Co. and Citigroup Inc.

    ‘One of The Pioneers’

    “He’s one of the pioneers of modern Wall Street,” said James Angel, an associate business professor at Georgetown University in Washington. Madoff’s firm was among the first to automate market-making, in which a dealer continually buys and sells stock. The company was among the largest to offer “payment for order flow,” or paying to handle customer orders.

    “The exchanges didn’t like the practice and questioned whether customers got the best price,” Angel said.

    Madoff was also sued today by the U.S. Securities and Exchange Commission.

    “Bernard Madoff is a longstanding leader in the financial services industry,” said defense lawyer Dan Horwitz. “We will fight to get through this unfortunate set of events. He’s a person of integrity.”

    Fix Asset Management in New York, which had at least $400 million with Madoff, said it was checking with its lawyers regarding its holdings.

    “We are very shocked,” John Fix, the son of founder Charles Fix, said by telephone from Greece. “We put in redemptions in the past few months and got our money back no problem. We are just so surprised about all this.”

    [...]

    Madoff ran his investment advisory business from a separate floor of his firm’s office, keeping financial statements “under lock and key,” prosecutors said. Early in December, he told one employee that clients wanted to redeem about $7 billion and that he was struggling to free up the funds, the government said. After he told another staff member Dec. 9 that he wanted to pay annual bonuses before the year’s end, two months early, a pair of senior employees asked to speak with him, prosecutors said.

    They had noticed he had been suffering from a “great deal of stress” and wanted to know what was happening, the U.S. said. When one of them challenged his explanations, Madoff invited them to his Manhattan apartment, saying he “wasn’t sure he would be able to hold it together” if they continued talking at the office, the government said.

    While meeting the pair at his home yesterday, Madoff conceded that he was “finished,” that his advisory business is “all just one big lie” and “basically, a giant Ponzi scheme,” the government said. The business had been insolvent for years with losses of about $50 billion, he told the employees, according to the criminal and SEC complaints.

    Madoff said he had about $200 million to $300 million left and planned to distribute money to select employees, family and friends before surrendering to authorities in about a week, the government said.

    Confessed to FBI

    Madoff allegedly confessed to FBI agent Theodore Cacioppi on Dec. 11, saying there was “no innocent explanation,” the SEC said in its complaint. Madoff said it was his fault and he had “paid investors with money that wasn’t there.” He also said he was “insolvent” and he expected to go to jail, it said.

    The Madoff firm had about $17.1 billion in assets under management as of Nov. 17, according to NASD records. At least 50 percent of its clients were hedge funds, and others included banks and wealthy individuals, according to the records.

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    Re: Madoff Charged in $50 Billion Fraud at Advisory Firm

    He just made bail for $10 million. I hope they give him something like 100 years to set precedent...
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Madoff Charged in $50 Billion Fraud at Advisory Firm

    HUGE Democrat and Democrat Obama supporter too. What a shocker!

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    Re: Madoff Charged in $50 Billion Fraud at Advisory Firm

    Quote Originally Posted by Truth Detector View Post
    HUGE Democrat and Democrat Obama supporter too. What a shocker!
    Huge Obama supporter? Credible source for this assertion? The only ones I found came from Foxnews.

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    Re: Madoff Charged in $50 Billion Fraud at Advisory Firm

    Quote Originally Posted by Iriemon View Post
    Huge Obama supporter? Credible source for this assertion? The only ones I found came from Foxnews.
    Oh yes Iriemon, how silly of me to have presumed he was a HUGE fan of Obama's and a Democrat supporter; after all, he gave hundreds of thousands of dollars to Democrats. I am sure he voted and supported McCain.

    Carry on!

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    Re: Madoff Charged in $50 Billion Fraud at Advisory Firm

    Quote Originally Posted by Truth Detector View Post
    Oh yes Iriemon, how silly of me to have presumed he was a HUGE fan of Obama's and a Democrat supporter; after all, he gave hundreds of thousands of dollars to Democrats. I am sure he voted and supported McCain.

    Carry on!
    LOL.

    Hi Iriemon. If they don't say he is a Republican supporter, donator, funder, collaborator... you can be 98.6785% sure he is a big time Democrat supporter, donator, funder, collaborator.

    Just a tip.

    Did you notice that the press almost never referred to Blago as a D?
    Last edited by zimmer; 12-21-08 at 01:55 AM.

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    Re: Madoff Charged in $50 Billion Fraud at Advisory Firm

    Quote Originally Posted by zimmer View Post
    LOL.

    Hi Iriemon. If they don't say he is a Republican supporter, donator, funder, collaborator... you can be 98.6785% sure he is a big time Democrat supporter, donator, funder, collaborator.

    Just a tip.

    Did you notice that the press almost never referred to Blago as a D?
    The press does that a lot. The rule of thumb is if there is no Republican designation, it must be a Democrat.

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    Re: Madoff Charged in $50 Billion Fraud at Advisory Firm

    The SEC fails once again to do its job. They had reports on this as far back as 1999. Conflict of interest exists at the SEC as many have million dollar a year jobs waiting for them once they leave the SEC.

    The question I have is if the woman Obama placed as SEC chairman will have the integrity to clean house. She appears to just be another old broom who won't sweep clean.
    "Everyone has his axe to grind - his favorite fiction to pimp. We live in a world of hustlers and clowns."
    ~ Bob Somerby

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    Re: Madoff Charged in $50 Billion Fraud at Advisory Firm

    Quote Originally Posted by Truth Detector View Post
    Oh yes Iriemon, how silly of me to have presumed he was a HUGE fan of Obama's and a Democrat supporter; after all, he gave hundreds of thousands of dollars to Democrats. I am sure he voted and supported McCain.

    Carry on!
    And how silly of me to have presumed you'd have credible support for your assertion. Though I really didn't presume it.

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    Re: Madoff Charged in $50 Billion Fraud at Advisory Firm

    Bernie Maddoff, the great leveler, did more to close the economic gap between the filthy rich and the poor than any program ever devised by any Liberal. He has caused many millionaires to go bankrupt, and even completely ruined a few billionaires in the process too. The price tag for those caught up in Maddoff's ponzi scheme? More than 50 billion dollars. The number is probably even much higher than that, but many will not come forward, having to admit in shame that, as predatory as they were, they were taken as prey by Maddoff himself.

    Who were the people that Maddoff fleeced? Slum lords, owners of sweat shops, and of course the rentier class (also known as the money for nothing class) - Those who made money without having produced a shred of goods or services. How could they do that? By being the economic predators they were.

    Yes, Maddoff is going to prison, but in the process, other predators are now in ruin, and that is good. Liberals may complain that we need more government to stop predators like Maddoff and his bunch. To them, I say no way. The market has a system of justice all of its own built right into it. What you are now witnessing is "market justice" at work. After seeing the mega fallout and destruction from this event, why would anyone in their right mind ask for government intervention, which would be nowhere as just as what has happened to this group of clowns? Let the economic deadwood of the world fall back to earth, and be forced to get real jobs, I say.

    In the world of predatory economics, it's dog eat dog. Some dogs have been eaten. Justice is served. Now lets move on.
    Last edited by danarhea; 12-22-08 at 06:50 PM.
    The ghost of Jack Kevorkian for President's Physician: 2016

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