On Dec. 11, 2008, Bernard L. Madoff confessed that his investment business was all "one big lie," a Ponzi Scheme that cost investors $65 billion. In this 2009 documentary, FRONTLINE explored how Madoff became the new poster child for Wall Street gall, greed and corruption.
Who Was Bernie Madoff
Bernie Madoff was a complex figure whose name remains synonymous with one of the biggest financial frauds in history. Here's a summary of his story:
Who was he?
- Bernard Lawrence Madoff, best known as Bernie Madoff, was an American financier.
- He founded Bernard L. Madoff investment Securities in 1960, which grew into a seemingly successful investment firm.
- From 1982 until his exposure in 2008, Madoff orchestrated a massive Ponzi Scheme, defrauding thousands of investors out of tens of billions of dollars.
What did he do?
- Madoff's Ponzi scheme involved promising investors steady, consistent returns supposedly achieved through a sophisticated trading strategy. However, no such strategy existed.
- He paid early investors with money from new investors, creating the illusion of success and attracting more capital.
- His scheme unraveled during the financial crisis of 2008 when investors sought to withdraw their money and Madoff couldn't sustain the facade.
Impact and consequences:
- Madoff's scheme left countless individuals and institutions, including charities and pension funds, financially devastated.
- He pleaded guilty to 11 federal crimes in 2009 and was sentenced to 150 years in prison, where he died in 2021.
- The Madoff scandal exposed significant weaknesses in financial regulation and led to reforms aimed at preventing similar frauds.