Kathmandu. December 10, 2008. The day the biggest financial scandal in U.S. history was revealed. Bernard Madoff, an American financier, told his sons Mark and Andrew that his advisory business was “a big lie”.
The sons filed a complaint with the FBI. Madoff was arrested the next day on December 11. The fraud amounted to about $65 billion. Madoff fooled thousands of investors around the world for 17 years.
Many people who trusted Madoff lost their retirement money. The court sentenced him to 150 years in prison. Son Mark committed suicide in 2010. Another son, Andrew, also died of cancer in 2014.
Madoff was also the former president of the Stock Exchange NASDAQ, the main scheme of this massive financial scandal. Madoff’s firm had two main components : Legislative Markey Making and Proprietorship Trading. Apart from this, there was a secret advisory business. Through which this whole fraud was done.
In his advisory business, Madoff promised an annual return of 8-12 per cent in any market in the market. This business attracted individuals, hedge funds, charities, and other organizations seeking steady returns.
He often refused to take money from investors to create an aura of exclusivity and increase demand. At the same time, he took advantage of his image as a former NASDAQ president to increase his confidence among the people.
Madoff didn’t take money from people and invest. Instead of investing the customer’s money in stocks, bonds or other securities, it was deposited in a bank account.
Madoff and his team used to create fake account statements to show fraudulent transactions and profits. Those details showed holdings in bluechip stocks and treasury securities.
Madoff used money from new investors to make payments when customers requested withdrawals. That is, as long as new deposits exceed withdrawals, this scheme can run smoothly.
Explaining how he was able to generate stable returns, Madoff claimed to have done so using a complex choice strategy involving stock purchases and index options. But in reality, there was no such business. It was just a cover to hide the fraud.
Madoff died on April 14, 2021. He died inside the prison. – Agency
