The Bernie Madoff Scandal

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In 1960, Bernard L. Madoff started a modest penny stock investment firm named “Bernard L. Madoff Investment Securities” in New York City. Madoff's firm made itself unique by using a new computer system to propagate quotes before the NASDAQ existed and this innovation made his firm very successful. Up to now Bernie Madoff was the epitome of successful stockbroking in America. However, Madoff quickly fell victim to the seduction of what his reputation could bring. By using his newfound financial success and sparkling reputation Madoff quickly began to dabble in front running, ponzi scheming, and ultimately complete fraud by forging return statements. Today, Madoff is known as the largest financial criminal in history after accruing 64.8 billion dollars from his clients by fraud.
It's not clear exactly when Madoff started his illegitimate practice. Madoff himself claims he began committing fraud in the early 90s, however federal investigators believe it may have began as early as the 70s. It's been suggested that much of Madoff's financial success prior to his ponzi scheme may have been achieved by an illegal practice called “front running”. Front running is where a stockbroker pushes a security on his clients when it's in position to make a jump in value. This spike in investors will push the value further so the stockbroker also invests in the security to reap the benefit. This is a type of market manipulation using the insider information naturally given to a stockbroker which makes it often difficult to detect. Although this is a common suspicion it has never been proven as the SEC investigated Madoff's firm several times in his earlier years and never found proof of fraud.
At some point between the 1970s and 2000, Bernie Madof...

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...enrath, and Amit R. Paley. "'All Just One Big Lie'" Washington Post. The Washington Post, 13 Dec. 2008. Web. 19 Mar. 2014.

Bernstein, Elizabeth. "Madoff Scandal's Deep Impact On Funding for Health, Science." The Wall Street Journal. Dow Jones & Company, 12 Feb. 2009. Web. 19 Mar. 2014.

Frank, Robert, Amir Efrati, Aaron Lucchetti, and Chad Bray. "Madoff Jailed After Admitting Epic Scam." The Wall Street Journal. Dow Jones & Company, 13 Mar. 2009. Web. 19 Mar. 2014.

Gendar, Alison. "Prosecutors Say Half of Bernie Madoff's Investors Lost Nothing in Ponzi Scheme." NY Daily News. NYDailyNews, 22 Sept. 2009. Web. 19 Mar. 2014.

Moyer, Liz. "Could SEC Have Stopped Madoff Scam In 1992?" Forbes. Forbes Magazine, 23 Dec. 2008. Web. 19 Mar. 2014.

Zuckoff, Mitchell. "Charities: The Foundation of Madoff's Scheme?" CNNMoney. Cable News Network, 29 Dec. 2008. Web. 19 Mar. 2014.

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