Bernard Madoff, former chairman of the NASDAQ stock market, was arrested yesterday for committing fraud by running a 50 billion dollar ponzi scheme. Major hedge funds and accredited investors had invested billions with Madoff’s firm, Bernard L. Madoff Investment Securities LLC. Madoff claimed to have a complex investment strategy that generated consistently positive returns. This was untrue. Madoff was just running one big ponzi scheme. He was taking money from new investors and using it to pay out money to older investors. Eventually when new money stopped flowing in there was no money to pay investors and the whole scam blew up.
A ponzi scheme is an investment scam that tricks investors out of money by promising extremely high returns. It is a fraudulent way of shifting money around. The scheme is named after Charles Ponzi who was one of the biggest con artists in American history.
1 Comment to “Bernie Madoff’s Giant Ponzi Scheme”
Shameful. He even did friends and family…