This one is bad. It involves institutional clients like banks, municipal governments, etc and because of that federal bail out funds may need to be used to save those entities that were scammed by this POS.
I'm shocked at the size of this thing. I'll be very curious to see this one unfold over the next few months.
You need to read a little more about this scam. This thing is beyond HUGE and still months away from being unraveled. Its pretty safe to say this will probably be the biggest scam of all time. Sure there are high profile clients like Spielberg but the vast majority of those damaged are institutional clients like state retirement systems, city governments, corporate pension plans, etc. This one will have major fallout the likes of which has never been seen. This is a financial nuclear bomb.
Trust me, I've read plenty on it. I have had dealings with a group that lost 40 million or so in it. I very much know how big it is. I'm more curious as to how much money is left, how much was actually lost, and when the ponzi started. I'd love to read an affidavit or other explanation by Madoff himself. In many ways, it's like no other scheme in history.
If there is any money left it wont be much. When a ponzi is at the end game there is no more money to rob from peter to pay paul. Madoff was trying to distribute the last couple hundred million to co-workers and friends. Everyone around Madoff who bailed in a golden parachute needs to be identified. Kids, friends, relatives, employees, etc. All of them who gained needs to forfeit every single penny or property they acquired with these funds. They may or may not be innocent but nobody should be allowed to keep assets acquired with scam funds.
I find it very hard to believe he blew 50 billion dollars. From what I can tell, there was 50 billion invested with him so how could he lose it all. He probably spent 100 million or so and I guess if it was going on for ten years, he was losing 3-4% per year and paying out 10%, it can go quick. I guess he figured he would die before it all came to light. Well the big question is, if he was distributing funds at the last minute, was it to investors who were close friends. In that instance, I don't see how you take the money from them. Secondly, there's no way in the world I believe he is the only one to know about this. I think his two sons were in on it and he tried to pull a quick one by having them "turn him in". You just can't pull off a scheme like this with no one knowing.
Oh the SEC knew about it, several people wrote letters and sent emails to them, saying that this guys returns didnt match his records or books. He cooked his books for years to show 10%-12% return on his investments. One guy wrote about 6 letters to the SEC about investigating him and they did nothing.
