Its a stunning fraud that appears to be of epic proportions, Andrew Calamari of the Securities and Exchange Commissions New York Regional Office said in a statement after the FBI arrested Madoff last week. Its unclear how many institutions and individuals will suffer from losses that federal authorities say Madoff privately pegged at $50 billion. The reason that he had easy assess to all of this was because he knew the system from being the chairman of Nasdaq from 1990-1991 and 1993.
Another one was the officials allege that Madoff falsified reports from a secretive money management service that he owned ” run separately from his main stock transaction firm ” to make it appear to be more successful than it was. Madoff allegedly kept it going by taking cash from unwitting new investors to pay customers who wanted to redeem their holdings. In a January SEC filing, Madoff said he managed $17. 1 billion in assets for 23 clients.
But potential victims could number in the hundreds and possibly thousands and include major banks, hedge funds, charities and pension funds. Responding to an SEC lawsuit, on Friday, U. S. District Judge Louis Stanton in New York froze the assets and accounts of Madoffs investment business and appointed Lee Richards, an attorney at Richards Kibbe & Orbe, as receiver. Madoffs lawyers have denied the charges but did not return calls for comment.
Madoff was released after posting $10 million in bail. He faces up to $5 million in fines and up to 20 years in jail if convicted. The SEC and U. S. Attorneys office say their investigation is continuing and declined to comment. Madoff got himself in trouble by using money he did not have to pay off customers from all the new invertors. Then after a while New York realized what he was doing so they arrested him for what he was doing because it was not ethical at all.