Bernie Madoff's First Worldwide Ponzi Scheme

Bernie Madoff is responsible for the biggest Ponzi scheme in history (Yang) and it’s the first worldwide Ponzi scheme (Henriques). Bernie Madoff’s business became so big that by 1980’s the “firm handled up to 5 percent of the trading on the New York Stock Exchange (“Bernard Madoff Biography”).”

He would guarantee usually high returns to investors and his scheme went on for decades (Yang). His popularity grew by word of mouth and he had A-List clientele with the likes of Steven Spielberg and Kevin Bacon (“Bernard Madoff Biography”). “One of Spielberg’s charities reportedly had 70 percent of its money disappear (Jacobs).” The Ponzi scheme was successful because of greed, nepotism, and incompetence from banks and the United States Securities and Exchange Commission (SEC).

He was able to do this for so long because he was well respected in the community. He started his own business in 1960 and helped launch the NASDAQ stock market (Yang). He stole $20 billion from investors though on paper that number is $65 billion (Yang). He had thousands of clients and there is a full list of names at the Wall Street Journal Online (Yang). The list consists of a document with 162

“After law school, Peter Madoff’s daughter became his deputy at Uncle Bernie’s firm, where she served as compliance director (Arvedlund).” She spent almost $400,000 at a high-end sex store on the company’s American Express (Arvedlund). The company also paid $2.9 million for a house in East Hampton for her and about $250,000 for rent in New York City between 2002 and 2004 (Arvedlund). “Shana married Eric Swanson – former SEC official whose team of examiners ran a routine check of Madoff’s brokerage firm in 2004 and reported nothing odd (Arvedlund).” It is obvious that this company was swimming in nepotism and fraud and that even the SEC didn’t have independence in auditing when it came to Bernie Madoff’s