Posted tagged ‘Madoff’

Sentencing Today for Madoff

June 29, 2009

A few hours to go and Bernard Madoff will know what lies in store for him.  Sentencing for the disgraced former investment manager is due to take place today and the case has certainly been worthy of a finance soap opera…

Over $50 billion is the amount to which Madoff fooled hundreds of private and corporate investors, which range from small-time to Hollywood stars to banks to even charities.  What they all didn’t realise is that the investment scheme in which they put their money (and trust) was in actual fact a Ponzi scheme.  New investors were being paid with funds from existing investors rather than profit.  Apparently nobody noticed until the financial downturn and recession took hold – investors tried to withdraw funds and found there was not enough to cover them.

Madoff set up Bernad L Madoff Securities, his investment company, after a time as head of Nasdaq.  With a career that began at the age of 22, Madoff was a trusted and respected figure on Wall Street.  Many wealthy and high-profile investors placed their money in his hands, but also ‘regular’ families.

Victims and prosecutors are asking for 150 years for the fraudster, his lawyer for 12.  Either way, it looks as though the 71-year-old financier is facing the rest of his life behind bars.

While his was a very unique case, it is always wise to remain pro-active with regards to investment.  Even if a company is well known, make sure you find out as much as you can before investing or hiring a manager.