BERNIE

MADOFF
A Ponzi Scheme

By Akshit
 OVERVIEW

• Bernie Madoff • Payout Rules • SEC • Slow down • 150 years Jail
• Ponzi Scheme • Sales strategy • Whistleblower • Confession • Suicides

2008
ABOUT THE SCAM INVESTIGATION FINANCIAL CRISIS JAIL & DEATHS!
• 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
PONZI SCHEME
“If It’s Too Good To Be True, It Probably is a Ponzi Scheme”
 THE SCAM
“In today's regulatory environment, it's virtually impossible to violate rules.”

• Started Bernard L. Madoff Investment Securities

1960 • 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”

• Exclusive Clientele
• Targeted charities to avoid sudden withdrawals
 INVESTIGATION
"The lie was simply too large to fit into the agency's limited imagination,"

HARRY MARKOPOLOS
The Whistleblower

• 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”
 YEAR 2008
• Global market deteriorated
2008 • 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

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.
 REFERENCES
https://www.investopedia.com/terms/b/bernard-madoff.asp

https://en.wikipedia.org/wiki/Madoff_investment_scandal

https://
www.bloomberg.com/news/articles/2018-12-11/the-bernie-madoff-ponzi-scheme-who-s-wher
e-now

https://
www.businessinsider.in/finance/5-years-ago-bernie-madoff-was-sentenced-to-150-years-in-pri
son-heres-how-his-scheme-worked/articleshow/37604176.cms
Any Questions?