Sand-Castle of Bernard Madoff

Updated: 07/20/2010 15:20
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sand castle of bernard madoff
Bernard Madoff story. Learn about the biography, business success and collapse of the sand castle by the the famous businessman.
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Maybe we all still remember the abnormal case of prodigy financier - Bernard Madoff. which flustered the whole Wall Street. HYIPNews.com would like you to get acquainted with his history, is he abusive swindler that has been justifiably condemned or just a thrived person who's wanted to create his own fuzzy business scheme, it's up to you to decide.

Bernard Lawrence "Bernie" Madoff was born on April 29, 1938 (age 72) in Queens, NY, USA. Graduated in 1956 from Far Rockaway Highschool, a high school that produced Carl Icahn, Joyce Brothers and at least three Nobel Prize winners, Madoff founded his first firm in 1960 after leaving law school, according to his company's Web site. His brother, Peter, joined the firm in 1970 after graduating from law school, it said. Madoff won an assignment to manage a $450,000 stock offering for A.L.S. Steel Corp. of Corona, New York, according to an SEC news digest.

By the late 1970s, and perhaps earlier, Madoff began managing money for investors, at least in part because he could require people to process trades through his firm, eventually attracted billions of dollars from investors. Some he knew personally. Others belonged to clubs he was a member of, including the Palm Beach Country Club in Florida and Glen Oaks Country Club in New York. He also served as chair of Sy Syms School of Business in Yeshiva University, made charitable donations to other Jewish organizations, including the 92nd Street Y, where he and his wife were listed as "Benefactors", chaired a gala fundraiser on behalf of Gift of Life, a Jewish bone marrow registry and cord blood bank. Several large hedge funds invested with Madoff in part because he did not charge traditional fees, instead collecting money solely for processing trades.

The key attraction, however, was Madoff's remarkably successful track record. A hedge fund run by Madoff, which described its strategy as focused on shares in the Standard & Poor's 100-stock index, averaged a 10.5 percent annual return over the past 17 years. His firm's Web site touts its “high ethical standards”. Actually Madoff was a Wall Street whiz with a golden reputation. Investors, including Jewish charities, entrusted him with billions. He was chief of the Securities Industry Association's trading committee in the 1990s and earlier this decade, represented brokerages in talks with regulators about new stock- market rules as electronic-trading systems and networks grew. Madoff built himself into a brand. He came to Wall Street with money saved as a Long Island lifeguard and built a family business employing many relatives, including his sons, and refused to sell the business or take it public. He advertised his integrity. A lawyer for Madoff told the Wall Street Journal: "Bernard Madoff is a longstanding leader in the financial-services industry with an unblemished record. He is a person of integrity. He intends to fight to get through this unfortunate event."

Madoff, was a pioneer of electronic trading. Bernard Madoff was influential with the NASDAQ Stock Market, the first electronic stock exchange serving as chairman of the board of directors in 1990, 1991 and 1993, according to a NASDAQ spokeswoman. He was an early advocate for electronic trading, joining roundtable discussions with SEC regulators considering trading stocks in penny increments. His firm was among the first to make markets in New York Stock Exchange listed stocks outside of the Big Board, relying instead on NASDAQ, where he made his fortune as a middleman between buyers and sellers of stock, and he eventually became chairman of NASDAQ.

He said when he started in the early 1990s, he felt "compelled" to give institutional investors strong returns despite the weak stock market and national recession. "When I began the Ponzi scheme I believed it would end shortly and I would be able to extricate myself and my clients from the scheme," he told the court. "However, this proved difficult and ultimately impossible." The SEC charged in its complaint that the returns were artificial. Madoff at some point started paying investors with money received from other investors, a Ponzi scheme, according to the SEC.

“In an era of faceless organizations owned by other equally faceless organizations, Bernard L. Madoff Investment Securities LLC harks back to an earlier era in the financial world: The owner's name is on the door. Clients know that Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm's hallmark.”

Since the remission of economic and financial weight of USA, Madoff, apart from his family business, reckon with creation of shady business scheme, so-called “Ponzi Scheme”, which contradicts the principals of Wall Street and is illegal on the territory of USA. He successfully provided it for more than 20 years, according to SEC casts, but did not manage to get out from it. In 2008, the year of his business denouement, amid a general market collapse, the fund reported that it was up 5.6 percent through November, while the S&P 500-stock index fell 38 percent.

In addition, the Madoffs were such significant contributors to UJA-Federation of New York that the charity placed a death notice in the New York Times, extending sympathies to the Madoff family following the death of a family member. The notice mentioned Bernard Madoff, and referred to the family as "cherished friends and leaders whose deep commitment to the New York Jewish community profoundly impacts millions of lives."


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