Emily Chan
Once a leading figure in the financial world, Bernie Madoff is now known for pulling off the largest Ponzi scheme in modern-day history. The “Monster of Wall Street,” as he was called, defrauded thousands of investors out of billions of dollars for nearly two decades.
Bernard Lawrence Madoff was born on April 29, 1938, in Brooklyn, New York. His father worked as a plumber before transitioning to the financial industry with his wife.
They founded Gibraltar Securities, which eventually had to close down. Madoff began his career in finance in 1960 by founding Bernard L. Madoff Investment Securities LLC.
He worked hard to build up his reputation and make a name for himself. By the late 1980s, he was earning roughly $100 million per year. In 1990, he became the chair of Nasdaq. High-profile clients came to him for help managing their investments.
Madoff attracted investors by promising large, consistent returns through a legitimate trading strategy called split-strike conversion.
However, instead of generating profits through market activities, he deposited funds from new investors into a bank account and used them to pay returns to earlier investors.
His scheme fell apart in 2008 when the state of the economy declined. Panicked investors withdrew their funds, and he was unable to maintain the fraud.
On December 10, 2008, he confessed his crime to his sons, who worked at his firm. The next day, his sons turned him over to the police. It was estimated that he had almost $65 billion in client assets.
The damage that Madoff had caused was catastrophic. Several charities were forced to close, and thousands of investors lost their life savings. Some of Madoff’s investors took their own lives. Two years after Madoff’s fraud was exposed, his eldest son, Mark, also committed suicide.
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