Biggest Ever Ponzi/Fraud was Disguised as a Hedge Fund $50bn

[grumpy]

Bernard Madoff arrested over alleged $50 billion fraud

Madoff told senior employees of his firm on Wednesday that “it’s all just one big lie” and that it was “basically, a giant Ponzi scheme,” with estimated investor losses of about $50 billion, according to the U.S. Attorney’s criminal complaint against him.

…

“There is no innocent explanation,” Madoff said, according to the criminal complaint. He told the agents that it was all his fault, and that he “paid investors with money that wasn’t there,” according to the complaint.

reuters.com/article/newsOne/ … IK20081212

[Proximo]

Holy Shit !!!

[EireClare]

one of the biggest financial frauds in history… but still dwarfed by the multi trillion dollar fraud that is the global international finance system as a whole.

[Coles2]

Ponzi scheme? Biggest ever?

"A Ponzi scheme is a swindle offering unusually high returns, with early investors paid off with money from later investors."

Bigger than the Irish Property Market? Not even close.

[ewd3]

@Proximo

Holy Shit !!!

Holy shit!!! is about the most apt comment

50 billion fraud…!!!

Madoff has been conducting a Ponzi scheme since at least 2005, the U.S. said. Around the first week of December, Madoff told a senior employee that hedge fund clients had requested about $7 billion of their money back, and that he was struggling to pay them.

[gaius]

And he’s owning up to try and get a lighter sentence?

[superpiper]

I’m fucking amazed at both the scale of the fraud, and the cander of the perpitrator.

This event is actually setting some deep seated alarm bells ringing in my head. for the last12 months, i’ve been toying with the idea that maybe we are heading for a global depression. I can’t help thinking after reading shit like this that Global economic collapse begining and the 50 year experiment with globalisation is begining to fail.

in a silly way, the worse it gats globally, the better we (Ir) will be.

i think we just might go back 50 yrs and begin growing our own food, which luck would have it, we can, easily.

[yoganmahew]

I’ve just started re-reading George Soros’ Crisis of Global Capitalism (1999, I think) again (not having had the knowledge to get very far the last time). He has a lot to say about the dangers of having a globalised financial system with local oversight. He has a lot to say about supply/demand imbalances. He has a lot to say about ‘market fundamentalism’ (his name for the modern version of laissez-faire capitalism). He has a lot to say about the crises of the late 1990s in emerging markets being a symptom of the problem and not the problem itself. George Soros, take a bow. (I am still only on the introduction, so no doubt my incredulity level will rise as the pitfalls of the current systems are exposed one by one and I can see the catastrophic effect of each one).

[Larry]

The man’s, erm, “honesty” is pretty astounding. About as clear a “it’s a fair cop” as you’ll ever see.

I think this must mean that, yes, it’s a stab at leniency, but I also think it shows total capitulation on his part. He knows that all these financial instruments and metrics are nonsense and trying to even pretend otherwise is like trying to defend alchemy. I suspect that this is the case with a vast, vast, vast amount for what has passed for economic activity over the last 10 years (property included of course).

[Duplex]

*'Our sophisticated proprietary automation and unparalleled client service **delivers an enhanced execution *that is virtually unmatched in our industry.’

And so say all of us.

madoff.com/dis/display.asp?id=203&mode=1&home=1

[Cypress]

Pretty easy to see why short dated T-Bills now have a negative yield with this kind of crap going on

[InForADime]

“$50 billion of fraudulent losses.”

Are they better or worse than real losses?

[2Pack]

news.bbc.co.uk/2/hi/business/7779442.stm

$50bn fraud charge at hedge fund

**The Madoff fraud could be one of the biggest yet

The former chairman of the Nasdaq stock market has been arrested and charged with securities fraud, in what may be one of the biggest fraud cases yet.**

Bernard Madoff ran a hedge fund which ran up $50bn (£33.5bn) of fraudulent losses and which he called “one big lie”, prosecutors allege.

**Mr Madoff is alleged to have used money from new investors to pay off existing investors in the fund.
**

It seems that other Hedge Funds were willing investors , after all who could imagine that a hedge fund was a Ponzi scheme ?? Amazingly none of our banks or pensions fund have confessed to anything , Yet! , but I fully expect that at least one of them had some funds in here …anything bar a bit of honest work would seem to be the norm in Irish Financial industry circles .

bloomberg.com/apps/news?pid= … refer=home

The biggest loser may be Walter Noel’s Fairfield Greenwich Group, whose $7.3 billion Fairfield Sentry Ltd. invested with Madoff’s eponymous firm, three people familiar with the matter said. Another was Kingate Management Ltd., whose $2.8 billion Kingate Global Fund Ltd. invested with Madoff, they said.

Investors, ranging from hedge funds that depend on outside managers to wealthy individuals, entrusted their money with the 70-year-old Madoff, who told employees before his arrest yesterday that his firm was “one big lie” and may have cost clients as much as $50 billion. His confession comes with hedge- fund assets poised to fall as low as $1.1 trillion by Jan. 1 from $1.9 trillion in June, reflecting market losses and customer redemptions, analysts at Morgan Stanley estimate.

“If the losses were $50 billion or even half that amount, it would be the biggest Ponzi scheme in history,” said Mark Schonfeld, the former head of the U.S. Securities and Exchange Commission’s New York office, who is now a partner at Gibson Dunn & Crutcher LLP.

‘Shocking Development’

Fairfield called Madoff’s arrest “a shocking development,” according to a statement on its Web site, and said it’s taking steps “to protect our investors and our firm.” A call to the Bermuda-based office of Kingate wasn’t returned. Madoff, whose New York-based firm was the 23rd largest market maker on Nasdaq in October, faces as much as 20 years in prison and a $5 million fine if convicted.

“Bernard Madoff is a longstanding leader in the financial services industry,” said defense lawyer Dan Horwitz. “We will fight to get through this unfortunate set of events. He’s a person of integrity.”

European investors in Madoff’s firm include U.K. fund manager Nicola Horlick’s Bramdean Alternatives Ltd. and UniCredit SpA’s Pioneer Alternative Investments. Bramdean said it had about 9 percent of its assets invested in Madoff products, including the Defender Ltd. fund and Rye Select Broad Market XL Porfolio, the firm said in a statement today. Pioneer put “substantially all” of its about $280 million Primeo Select Fund with Madoff, according to a fact sheet on Pioneer’s Web site.

Chairman of the Nasdaq should ring a bell after 2000

[jmc]

@2Pack

It seems that other Hedge Funds were willing investors , after all who could imagine that a hedge fund was a Ponzi scheme ?? Amazingly none of our banks or pensions fund have confessed to anything , Yet! , but I fully expect that at least one of them had some funds in here …anything bar a bit of honest work would seem to be the norm in Irish Financial industry circles .

This is as big as the Lehman Chapter 11. There goes the shadow banking system.

For an insider view…

nihoncassandra.blogspot.com/2008/12/bernie-comes-out-of-closet.html

The shadow banking system has been tottering since BS blew up in March when it became obvious that there was going to be a fight to the death between the regulated (sic!) banking system and the shadow system. There was no doubt who was going to win, eventually. Hedgistan could never run to the cental banks for a bail out. It was just a matter of how much collateral damage was done as the shadow system collapsed.

Its less than two week to the closing of the 4Q and Y so my guess the results of the final implosion wont hit till the end of 1Q next year. March 2009 is shaping up to be absolutely brutal. A short sharper version of Sept/Oct 2008.

Tin hats on and start digging that bunker even deeper…

[jabaar]

Why is is that a ponzi scheme is never discovered until it is completely out of control?? SOmeone knew this shit a long time ago.

Same goes for the irish property ponzi scheme!!!

[mikewest]

Er 2pack,

Ahem —>thepropertypin.com/viewtopic.php?f=19&t=16400

[2Pack]

oops , still ¬!

[Inis_Man]

Bernard Madoff ran a hedge fund which ran up $50bn (£33.5bn) of fraudulent losses and which he called “one big lie”…

“Bernard Madoff is a longstanding leader in the financial services industry,” said defense lawyer Dan Horwitz. “… He’s a person of integrity.”

OK, something doesn’t add up here - how the hell has the man who ran the biggest ponzi scheme in history now become ‘a person of integrity’?? Obviously Dan Horwitz thinks words can be made to mean whatever you want them to mean, just like numbers on a make-up hedge fund balance sheet!!!

[mikewest]

@Inis Man

Bernard Madoff ran a hedge fund which ran up $50bn (£33.5bn) of fraudulent losses and which he called “one big lie”…

“Bernard Madoff is a longstanding leader in the financial services industry,” said defense lawyer Dan Horwitz. “… He’s a person of integrity.”

OK, something doesn’t add up here - how the hell has the man who ran the biggest ponzi scheme in history now become ‘a person of integrity’?? Obviously Dan Horwitz thinks words can be made to mean whatever you want them to mean, just like numbers on a make-up hedge fund balance sheet!!!

It’s because he’s now a decent honest criminal “Its a fair cop guv”

[obese_cat]

@2Pack

It seems that other Hedge Funds were willing investors , after all who could imagine that a hedge fund was a Ponzi scheme ?? Amazingly none of our banks or pensions fund have confessed to anything, yet, but I fully expect that at least one of them had some funds in here …anything bar a bit of honest work would seem to be the norm in Irish Financial industry circles .

Boo f%^kin’ hoo, most of the actions by hedgies caused this mess. Merkel wanted to regulate them a year ago and Brown and Bush would have none of it.