Born in 1938, former American stock broker, investment adviser, and non executive chairman of the NASDAQ, Bernard Madoff is believed to be one of the greatest frauds of all time. He was succeeded in cheating the public and the authorities for around 30 years using a Ponzi scheme. He was succeeded in adding one more new chapter to the fraud histories in the world. Anyone who is working in investment securities department in the world is now taking lessons from the innovative investment scandal anchored by Madoff. Madoff admitted that he has started his fraudulent activities in early in the 1990’s. However federal investigating agencies believed that he started his activities as early as in the eighties itself.
“Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on December 11, 2008” (Bernie Madoff’s Investment Scandal Exposed, 2010).The Wall Street firm took the investors by surprise because of the high and consistent short term returns offered to the investors. The Ponzi scheme offered to the investors by Madoff was attracted many investors because of its earning potential.
A Ponzi scheme can be defined as a fraudulent investment operation which offers the investors high returns other investments cannot guarantee. Most of the other investment schemes in America are offering high returns on investments only if the investors invest their money for longer periods whereas the Ponzi scheme offers high returns to investments of even shorter period. This fraudulent investment operation pays returns to separate investors from their own money rather than from any actual profit earned. The offers put forward by Madoff through his Ponzi scheme were exciting which increased the traffic flow towards his offices. Investors started to invest heavily in this Ponzi scheme