In the largest securities fraud case in history, Bernard L. Madoff has disgraced the face of investment banking further, by losing an estimated $50 billion via conducting what is known as a Ponzi scheme. In other words, he would pay returns to his investors out of the principal of other investors instead of real profits.
How he managed to keep the Securities and Exchange Commission at a distance is a question under much public scrutiny. He has later commented that his actions were catalysed by "irrational euphoria".
SOME OF THE REPORTED LOSSES CAUSED BY MADOFF:
- Clients of Santander, Spain - $3.1bn
- HSBC, UK - $1bn
- Royal Bank of Scotland, UK - $601m
- BNP Paribas, France - $460m
- Nomura, Japan - $303m
This isn't the first tme Madoff has been investigated for dodgy business, it is now known that the SEC received reports about him in 1999, almost ten years ago. The pieces of the puzzle don't seem to fit, one can't help but question who has known about this; and moreover, what else is going.
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