Speaking by phone from prison, Madoff told journalist Steve Fishman that his father, who had run a sporting goods store, went out of business due to steel shortages during the Korean War:
To compete with firms that were members of the New York Stock Exchange trading on the stock exchange's floor, his firm began using innovative computer information technology to disseminate quotes. He has built a highly profitable securities firm, Bernard L.
Madoff Investment Securities, which siphons a huge volume of stock trades away from the Big Board. Madoff's firm can execute trades so quickly and cheaply that it actually pays other brokerage firms a penny a share to execute their customers' orders, profiting from the spread between bid and asked prices that most stocks trade for.
His younger brother, Peter, was senior managing director and chief compliance officer,  and Peter's daughter, Shana Madoffwas the compliance attorney.
Madoff's sons, Mark and Andrew, worked in the trading section,  along with Charles Weiner, Madoff's nephew.
Order flow is an issue that attracted a lot of attention but is grossly overrated. The Journal concluded Madoff's use of futures and options helped cushion the returns against the market's ups and downs.
Madoff said he made up for the cost of the hedges, which could have caused him to trail the stock market's returns, with stock-picking and market timing.
The sale of the 'calls' is designed to increase the rate of returnwhile allowing upward movement of the stock portfolio to the strike price of the 'calls'. The 'puts', funded in large part by the sales of the 'calls', limit the portfolio's downside.
If he was not making real investments, at that rate the principal would last 20 years. By targeting charities, Madoff could avoid the threat of sudden or unexpected withdrawals. While most Ponzis are based on nonexistent businesses, Madoff's brokerage operation was very real.
Sales methods[ edit ] Rather than offer high returns to all comers, Madoff offered modest but steady returns to an exclusive clientele.
The investment method was marketed as "too complicated for outsiders to understand". He was secretive about the firm's business, and kept his financial statements closely guarded. Even at the end of Novemberamid a general market collapse, the same fund reported that it was up 5.
That's why we were all so stunned. The investigation concluded in Bienes began his career working as an accountant for Madoff's father-in-law, Saul Alpern. Then, he became a partner in the accounting firm Alpern, Avellino and Bienes. Inthe firm began advising its clients about investing all of their money with a mystery man, a highly successful and controversial figure on Wall Street—but until this episode, not known as an ace money manager—Madoff.
In a report to the SEC they mentioned the fund's "curiously steady" yearly returns to investors of However, the SEC did not look any more deeply into the matter, and never publicly referred to Madoff.Apr 12, · News about Bernard L.
Madoff. Commentary and archival information about Bernard L. Madoff from The New York Times. The Trustee files a lawsuit against Ruth Madoff, the wife of Bernard L.
Madoff, seeking to recapture approximately $45 million in funds transferred to her or to companies in which she was an investor. Apr 12, · Victims of Bernard Madoff’s Ponzi Scheme to Receive Millions More.
With this distribution, the second in a series of payouts, about 21, .
Bernard Lawrence "Bernie" Madoff is an American financier who executed the largest Ponzi scheme in history, defrauding thousands of investors out of tens of billions of dollars over the course of. Bernie Madoff news and opinion.
similar background, and history.
He was king of a Madoff-like blow-hard without the Bernie soft playfulness -- at first anyway. You'd think that Bernard. Dec 12, · The shocking revelation that prominent investment manager Bernard Madoff's hedge fund, Ascot Partners, was a giant scam will intensify redemptions from scores of other hedge funds that will be.