How not be Madoff?

Bernard Lawrence "Bernie" Madoff (born April 29, 1938, in New York City) is a former American businessman and former chairman of the NASDAQ stock exchange, who operated the largest investor fraud ever committed by a single person. On March 12, 2009, Madoff pled guilty to an 11-count criminal complaint admitting to defrauding thousands of investors through a massive Ponzi scheme. Federal prosecutors estimated client losses, which included fabricated gains, of almost $65 billion. He had been confined to his Manhattan penthouse apartment during the investigation, and was subsequently incarcerated after his guilty plea. There was no plea deal with prosecutors. He faces spending the rest of his life in prison, and up to $170 billion in restitution.

Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on December 11, 2008. Over the years, he built up a golden reputation. Investors, including Jewish charities, entrusted him with billions. Madoff's firm was one of the top market maker businesses on Wall Street, (the sixth-largest in 2008), often functioning as a "third-market" provider which bypassed "specialist" firms, directly executed orders over the counter from retail brokers. The firm also had an investment management and advisory division that was the focus of the fraud investigation.

According to the original federal complaint, Madoff claimed his firm had "liabilities of approximately US$50 billion." 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. On December 10, 2008, he confessed to his sons that the asset management arm of his firm was a giant Ponzi scheme — as he put it, "one big lie." They then passed this information to authorities. 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. Some investors, journalists, and economists have questioned Madoff's statement that he acted alone without assistance. Law enforcement continues to investigate if others were involved in Madoff's fraud. The SEC conducted several investigations into Madoff's business practices since 1999, which critics contend were incompetently handled.

Madoff was a philanthropist who served on boards of nonprofit institutions, many of which entrusted his firm with their endowments. He is a former National Treasurer of the American Jewish Congress. The collapse and freeze of his personal assets and that of his firm's have had repercussions on businesses, charities and foundations around-the-world, including the Robert I. Lappin Charitable Foundation, the Picower Foundation, and the JEHT Foundation which were forced to close as a consequence.
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