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Bernard “Bernie” Madoff

Bernard “Bernie” Madoff. Wednesday, February 25, 2009. Madoff Background. Bernard L. Madoff Investment Securities LLC started in the 1960’s

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Bernard “Bernie” Madoff

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  1. Bernard “Bernie” Madoff Wednesday, February 25, 2009

  2. Madoff Background • Bernard L. Madoff Investment Securities LLC started in the 1960’s • Madoff and BMIS have additionally conducted an investment advisory business providing investment services for wealthy clients, institutions, schools, and charities. • Guaranteeing double digit returns even during the worst of markets • Red flagged by SEC in the 1990’s numerous times

  3. Ponzi Scheme • A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from profit. • Did not invest for 10 years and gave quarterly reports that showed a 12% return • 17 Billion dollars and climbing • Banks and hedge funds around the world—in the US, Britain, Italy, Spain, France, Switzerland and Japan • University endowments, charities and other institutions that entrusted their money to Madoff • Prominent and wealthy individuals—including J. Ezra Merkin, the chairman of GMAC, Fred Wilpon, the principal owner of the New York Mets, Norman Braman, the former owner of the Philadelphia Eagles professional football team, Frank Lautenberg, the multimillionaire Democratic senator from New Jersey, and Mortimer Zuckerman, the owner of the New York Daily News

  4. Stretch Far and Wide • Banks and hedge funds around the world—in the US, Britain, Italy, Spain, France, Switzerland and Japan • University endowments, charities and other institutions that entrusted their money to Madoff • Prominent and wealthy individuals—including J. Ezra Merkin, the chairman of GMAC, Fred Wilpon, the principal owner of the New York Mets, Norman Braman, the former owner of the Philadelphia Eagles professional football team, Frank Lautenberg, the multimillionaire Democratic senator from New Jersey, and Mortimer Zuckerman, the owner of the New York Daily News

  5. Implications • What is being widely reported as the largest financial fraud in history goes far deeper and extends far wider than the machinations of a single broker and fund manager. It marks a new stage in the disintegration of the US and world financial system—the convulsive outcome of decades in which a vast accumulation of personal wealth at the top has been achieved on the basis of semi-criminal forms of financial manipulation unrelated to production and the creation of real value. To a great extent, the entire economy has been transformed into a giant Ponzi scheme. The collapse of trillions in paper assets will assume ever more malignant forms. • http://www.wsws.org/articles/2008/dec2008/pers-d16.shtml

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