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He is young and promising, and started from scratch and founded the most famous securities investment company on Wall Street.
He has promoted the "electronicization" of stock trading and is the founder of Nasdaq and chairman of the board of directors.
However, he has gone out of the American elite circle and deceived 37,000 investors in 136 countries in 40 years.
Countless famous companies were caught, from the owner of the New York Metropolitan Baseball Team to the great director Spielberg , and even HSBC lost all his money...
He was sentenced to 150 years in prison and died in prison yesterday at the age of 82.
He is Bernie Madoff, the largest maker of "Ponzi scheme" in American history.
Today, let’s talk about his story…
From the business of becoming a Wall Street
In April 1938, Bernie Madoff was born in a low- and middle-income Jewish family in Queens , New York. He was the second child at home. Madoff was not living a well-off life in his childhood.
My father is a plumber. My mother once opened a securities company in Queens, but was later closed by the regulatory authorities for non-compliance.
Although his mother's company did not make much money, it affected Madoff - he became interested in the financial industry when he was young.
In 1956, Madoff graduated from high school and entered Hoffst University in Long Island, obtained a bachelor's degree in political science, and then entered Brooklyn Law School for further studies.
After less than a year in law school, Madoff dropped out of school and went to Wall Street to open a company.
It turns out that Madoff's lover in high school and his later wife Ruth had already worked well on a stock exchange on Wall Street.
Under the instigation of his wife and his long-term interest in the financial industry, in 1960, Madoff mustered up the courage to officially enter Wall Street.
He used the $50,000 he borrowed from his father-in-law and the $5,000 he saved from working as a security guard as startup capital to found Madoff Securities Investment Company (MADF).
MADF's office building
Who would have thought that this young man, who was only 22 years old, would be among the ranks of celebrities in the American financial industry with this company, and would also use this company to create the largest "Ponzi scheme" in American history in the future...
At the beginning, Madoff's company could only buy and sell some "pink list market" company stocks. Most of the so-called "pink list market" companies were companies that did not meet the listing conditions.
This is like the "flea market" of stocks, mixed with dragons and snakes. You may be lucky enough to invest in the stocks of high-quality companies, or you may buy inferior company stocks and lose all your money.
started in such a place, and Madoff gradually became bigger and stronger, becoming a powerful figure on Wall Street. The first successful move of
Madoff was to vigorously promote the most advanced computer technology at that time to innovate stock trading and transfer stock trading from phone to computer terminal.
, driven by a number of securities companies such as MADF, many "over-market stocks" conducted on computers have gradually grown and become today's Nasdaq.
Of course, not only relying on advanced technology, Madoff also became famous on Wall Street with its excellent performance:
MADF Securities Company's performance is really good and stable.
Their promised return on investment is stable at 1% per month, and the annualized return on investment is between 10% and 12%.
To put it simply and roughly, if you invest $10,000, you will earn $100 per month, and you will earn $1,000 to $1,200 per year. Ten years later, $10,000 doubled into $20,000.
and later, Madoff often promised annualized yields as high as 18% to 20%.
This is simply too profitable! !
's outstanding performance has made Madoff's company flourish, and his influence is also increasing day by day.
Some wealthy people came here to invest a lot of money in Madoff to get stable and generous returns.
The most famous of these is the Jewish billionaire Carl Shapiro. As one of the earliest investors of Madoff, after testing the waters, he not only put his millions in Madoff to add value, but also brought a lot of his relatives and friends into the trap.
With the endorsement of Shapiro, many people feel at ease to invest their money in Madoff, and some people dare not object to Shapiro's face:
"Only people dare to question the securities companies recommended by billionaires like Shapiro..."
The new "Ponzi Scam"
The stable performance made Madoff a mythical existence on Wall Street, and also aroused some people's doubts.
In fact, as skeptics expected, there may be an ulterior secret behind perfect performance...
Madoff broke through the moral bottom line and began to fabricate a "Ponzi scheme".
But according to one of his veteran financial managers, this person found that there was something wrong with Madoff's accounts when he entered the company in 1975.
It turns out that Madoff claimed that "MADF securities companies have an extremely stable return on investment" was actually a fraud made by him using the ancient "Ponzi scheme" and fake...
"Ponzi scheme", which is simply a scam of "demolition of the east wall and repairing the west wall".
The specific approach is to use the money of new investors to pay interest and short-term returns to old investors, create the illusion of "very profitable", and then defraud more investments.
It was originally planned by an Italian immigrant named Charles Ponzi in 1919. He deceived people to invest in a fictitious company and promised a high return of 40% in three months.
As a result, in just seven months, Ponzi attracted more than 30,000 uninformed investors. He kept using the money from new investors to pay the returns of old investors. The whole scam lasted for a year before it was exposed...
Charles Ponzi
Things are different when it comes to Madoff. The extremely smart Madoff uses skills and means and his reputation in the industry to cover up the scam. He has used the "Ponzi Scam" to the pinnacle and unprecedented realm...
also attracts new investors to come in and repay the returns of old investors' returns, but Madoff's method of covering up is much more clever.
First of all, Madoff is good at packaging himself. He uses his position in the financial industry and his influence in the Jewish rich club to create a glamorous character of "perfect high-end investor".
He never takes the initiative to attract business, but instead attracts wealthy friends and social experts to invest by breaking into the circle of rich people, and conducts "word-of-mouth publicity" through them.
In order to attract wealthy investors, Madoff's life is as close to the super rich as possible and bought such a villa in Florida...
owns such a luxury house in the center of Manhattan...
traveling on such a private plane...
After accumulating rich rich people and celebrities' connections, Madoff deliberately raised the investment threshold:
Those who join MADF Securities Investment Company cannot just have money, and they must also trust him 100%.
So, through various acquaintance channels, we "try to do our best" to get to know Madoff's investors. Under the dazzling halo of Madoff's personality, we believe in his so-called investment and obediently hand over the large amount of assets to him for management...
Madoff's other magic weapon is to "play mysterious" as much as possible. If an investor wants to know the investment project or where the money goes, for example, ask the following question: Why can
ensure such a stable return all year round?
Why is the futures market ups and downs, and the investment returns of Madoff are always stable and unchanged?
Madoff's securities investment companies usually reply to these words:
Don't ask, don't say it.
Because the most powerful investment strategy is always secret...
If you really want to break the batter and ask the end, then Madoff will probably not do this business immediately and kick you out.
In short, Madoff adheres to one principle:
or come in and pay the money to get the profit, don't ask anything.
or don't come!
is like this, with his character setting and playing with mystery. In addition, Madoff himself served as the chairman of the board of directors of Nasdaq in the entire 1990s. His important position in the financial industry makes it more and more difficult for people to question the rationality and legitimacy of his investment returns.
Over the years, no one has questioned it, but under the carefully created personality design of Madoff, his obvious nepotism, lack of control, and used the audit conducted by unknown accounting firms to escape...
was all let go by the senior Wall Street elites.
In recent years, more and more investors have been directly and indirectly brought in by Madoff, and their reputation has become more and more famous.
Celebrities in the entertainment industry have great director Spielberg...
Hollywood veteran actress Sasha Jiabao...
veteran movie star John Malkovic ...
Business people have dream factory president Katzenberg...
New York metropolitan baseball boss, real estate developer Fred Wilpon…
The best thing is that Madoff even cheated his professional peers and invested a lot of money into his company. The world-renowned financial institutions that invested large amounts of money in his company include:
HSBC…
Swiss Private Bank Reichmuth, New York Fairfiled Greenwich Fund, etc.
So many celebrities and famous companies invested money, can Madoff use this money to buy stocks, invest futures, and invest in fixed assets to fill in the loss of payment income?
The answer is: No...
Started very early, Madoff has stopped investing and completely used the money of new investors to compensate the returns of old investors for their return. The so-called "demolition of east walls and repairing the west walls", the snowball is getting bigger and bigger, and there are more and more companies, famous companies, and individuals involved.
By the eve of 2008, there were 37,000 investors, spread across 136 countries around the world, with an investment amount of up to US$65 billion...
The truth is revealed
For more than 0 years, Madoff has covered the company's financial situation, not only covering up the company's financial situation secretly, but also locking the account documents of the investment consulting business in a safe.
Therefore, after playing Madoff's super "Ponzi scheme" for so many years, he didn't even know his own son...
In the end, everything was in line with the old saying, "Walking by the river often, there is no way to wet your shoes."
In 2008, the US subprime mortgage crisis broke out and quickly affected the financial market.
Many companies and individuals who invested in Madoff have demanded redemption funds, with a total amount of up to 7 billion US dollars. The financial pressure is so great that Madoff became an ant on the hot pan. He finally realized that the scam cannot be saved...
On the evening of December 10 that year, Madoff had no choice but to confess the truth of the whole scam to his two sons who were senior executives in his company.
The two sons were shocked and quickly reported their father to the authorities.
The next day, Madoff was arrested by the FBI for suspected fraud. The largest "Ponzi scheme" in American history, which lasted for nearly 40 years and involved in a case of $65 billion, was finally revealed.
In 2009, the Southern District Court of New York sentenced Madoff himself to 150 years in prison and fined $170 billion on as many as 11 charges.
Madoff was sent to jail and moved his whole body. His son Mark was investigated for being involved in the case and hanged himself on the second anniversary of his father's arrest in 2010.
Mark
His other son Andrew died of lymphoma in 2014.
Andrew
Most of Madoff's family were implicated. A French fund manager was unable to bear the responsibility of huge investment losses because he invested in Madoff's company and was unable to bear the responsibility for huge investment losses. In 2008, more than US$9.8 billion of the fraudulent funds in Madoff's "Ponzi Scheme" were recovered, of which 5.25 billion were returned to the victim.
However, most corporate investors are difficult to recover their losses and they lose all their money.
For example, HSBC, Japan Nomura Securities, BNP Paribas, etc., their losses are often as high as billions.
Yesterday, Madoff, who had fabricated the largest "Ponzi scheme" in American history, died in prison. Most media speculated that he died naturally.
As a number one scam in history that has deceived countless investors and caused tragic losses, Madoff himself died in prison, but his two sons left him first. Many implicated people either committed suicide or went bankrupt.
This ending all comes from the ancient cause:
greed...
Looking back at the entire "Madoff Ponzi scheme", the method is actually not clever, and there are many loopholes in actual operations.
However, even the smartest and most authoritative investors will be blinded by the halo of character created by the scammers.
It seems that the most powerful trick is always to deceive people's hearts...
Ref:
https://nymag.com/news/crimelaw/66468/
https://www.dailymail.co.uk/news/article-9470699/Rise-fall-Americas-biggest-Ponzi-conman-Bernie-Madoff.html
https://www.dailymail.co.uk/news/article-9472031/ Fraudster-folded-list-Bernie-Madoff-running-65bn-Ponzi-scheme-writes-TOM-LEONARD.html
https://en.wikipedia.org/wiki/Bernie_Madoff
https://www.nbcnews.com/news/us-news/bernie-madoff-mastermind-behind-largest-ponzi-scheme-history-dies-82-n1139831
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