2. OVERVIEW
ABOUT THE SCAM INVESTIGATION
2008
FINANCIAL CRISIS JAIL & DEATHS!
• Bernie Madoff
• Ponzi Scheme
• Payout Rules
• Sales strategy
• Slow down
• Confession
• 150 years Jail
• Suicides
• SEC
• Whistleblower
3. • Chairman of NASDAQ stock
exchange
• Chairman of National Securities
Clearing Corporation
• Chairman of International
Securities Clearing Corporation
• Member of Board of directors of
National Association of Securities
dealers
• Chairman of NASD small order
execution committee
• Vice Chairman of Securities
Industry Association(SIA) trading
committee
• Chairman of National Business
Conduct Committee
• Member of SIA federal
Regulation Committee
• Member of SEC Advisory
committee
5. THE SCAM
1960
• Started Bernard L. Madoff Investment Securities LLP
• Simply deposited the money in 1 Bank Account at JPMorgan Chase
• JPMorgan Chase made $483 million from these deposits
• No real investment
• High returns (up to 20%) but consistent
• “The 5% payout rule” and “Reputation”
• ExclusiveClientele
• Targeted charities to avoid sudden withdrawals
“In today's regulatory environment, it's virtually impossible to violate rules.”
6. HARRY MARKOPOLOS
TheWhistleblower
• Filed complaint with Securities and Exchange
Commission in 2000 | IGNORED
• Another letter to SEC in 2005 stating
“Madoff Securities is the world's largest Ponzi
Scheme.” | SEC found “NO SIGNS OF FRAUD”
INVESTIGATION
"The lie was simply too large to fit into the agency's limited imagination,"
7. YEAR 2008
2008
• Global market deteriorated
• Redemptions > Investments
• Borrowed money to repay investors, but FAILED!
• On Dec. 10, 2008, Bernie confessed to his sons
• Mark and Andrew Madoff turned their father into the FBI
• Bernie owed US$65billion at the time of arrest
• Sentenced to 150 years in prison and forfeited $170 million in assets
8. DEATHS!
• William Foxton shot himself in a park, having lost all his life savings.
• Madoff's elder son, Mark Madoff committed suicide in 2010.
• Charles Murphy, a hedge fund executive with Fairfield Greenwich
Group that invested more than $7 billion with Madoff killed himself in 2017.
a predecessor of the Financial Industry Regulatory Authority (FINRA). It was responsible for the operation and regulation of the NASDAQ stock market and over-the-counter markets.
Created an image of exclusivity by initially turning clients away
Created an image of exclusivity by initially turning clients away
Created an image of exclusivity by initially turning clients away
Created an image of exclusivity by initially turning clients away
Created an image of exclusivity by initially turning clients away