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Find out more about Paul: Paul Springer writes about corporate finance. He began his career on the options floor of the Pacific Stock Exchange. He’s a Ph.D. candidate at U.C. Berkeley and includes classical languages and the study of human error among his hobbies. |
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Bernard Madoff, one of the Nasdaq market's inventors and a (formerly) highly respected money manager, was arrested in New York City Thursday on charges that he caused $50 billion to evaporate.
In an indictment involving one of the biggest Ponzi schemes ever, federal prosecutors charged Madoff with one count of securities fraud that required $10 million bail. Madoff, who was quoted by Bloomberg as saying he "had only $200 million or $300 million left," posted bail after being arrested by the FBI and ecorted to court.
The Bloomberg account draws on sources who said Madoff admitted he lost all his money long ago and has essentially been living a lie for several years.
Recent months' horrific investment climate may have brought the Madoff debacle to light as investors demanded redemptions and put a crimp in what makes a Ponzi scheme work--the perp's ability to pay old investors with cash fleeced from new ones.
The Securities and Exchange Commission had 16 forensic accountants on hand to unravel the mess, according to Financial Times.
Madoff purportedly said he planned on giving his remaining funds to employees and family. What a nice guy.
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