Former Chairman Of The NASDAQ Stock Market Is Likely To Spend 20 Years In Prison For Giant Securities Fraud

Bernard L. Madoff, the founder of Bernard L. Madoff Investment Securities LLC and former Chairman of the NASDAQ Stock Market, is arrested and charged with one count of securities fraud, Acting U.S. Attorney for the Southern District of New York

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Bernard L. Madoff, the founder of Bernard L. Madoff Investment Securities LLC and former Chairman of the NASDAQ Stock Market, is arrested and charged with one count of securities fraud, Acting U.S. Attorney for the Southern District of New York Lev L. Dassin and Assistant Director-in-Charge of the FBI’s New York Office Mark J. Mershon announced.

The securities fraud charge in the complaint carries a maximum penalty of 20 years in prison and a maximum fine of $5,000,000. According to the complaint filed in Manhattan federal court, Bernard L.Madoff conducts certain investment advisory business for clients that is separate from the firm’s proprietary trading and market making activities.

Two senior employees of the firm allege that Madoff ran his investment adviser business from a separate floor in the New York City offices of Bernard L. Madoff Investment Securities LLC. and that he kept the financial statements for the firm under lock and key. Acording to senior employees Madoff was “cryptic” about the firm’s investment advisory business.

According to a document filed by Madoff with the U.S. Securities and Exchange Commission (SEC) on 7 January 2008, Madoff’s investment advisory business served between 11 and 25 clients and had a total of approximately $17.1 billion in assets under management.

On 10 December 2008 Madoff informed the Senior Employees, in substance , that his investment advisory business was a fraud, that he was “finished,” that he had “absolutely nothing,” that “it’s all just one big lie,” and that it was “basically, a giant Ponzi scheme.

Madoff also stated that he estimated the losses from this fraud to be at least approximately $50 billion. Madoff further informed the Senior Employees that, in approximately one week, he planned to surrender to authorities, but before he did that, he had approximately $200-300 million left, and he planned to use that money to make payments to certain selected employees, family and friends.Currently 70 year old Madoff resides in New York City.

Dassin praised the investigative work of the FBI and thanked the SEC for its help.Assistant U.S. Attorney Marc Litt is in charge of the prosecution.

L.D.

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