Bernard Madoff
Bernard Madoff
Cause of action: The cause of action was the Bernard Madoff created a ponzi scheme by taking money from investors and putting it in his pocket instead of investing it. He paid initial investors with money he collected from more recent victims of his scheme. His downfall came when many people attempted to close their accounts with him and he did not have enough cash coming in to pay them all at once.
Key facts: Bernard Madoff continued to obtain money from investors over a number of years always paying the oldest clients with money obtained from the newest clients. In 1997 Madoff allegedly begins a new option strategy- broad based portfolio of S&P securities and hedged with derivatives. Many companies use Madoff exclusively to invest their portfolios starting in the early 1980’s and continuing on through 2009 when he was charged with fraud. In 2008 Madoff pushes one of those investing companies to raise more money for his brokerage firm. Also in 2008 he tells his wife to transfer money from a brokerage acct to her own personal bank acct after telling his sons he is facing 7 billion dollars in redemptions. In Dec 2008 Madoff allegedly confesses to his sons the night before turning himself in to face charges. In 2009 Madoff was caught trying to mail jewelry and watches worth millions to family and friends in an effort to keep as much money as he could. Madoff pled guilty on June 15, 2009
Irrelevant Facts: Bernard Madoff opened his own securities company in 1960. Harry Markopolis submitted an 8 page memorandum to the SEC. The memorandum outlined the fraud and giving clear red flags to the SEC in 2000. The SEC ignored the memorandum stating there was no fraud. In October and November 2005 Markopolis again attempted to notify the SEC of the fraud and was unsuccessful. Markopolis again emails members of the SEC in 2007 to alert them to fraud on the part of Bernard
Cause of action: The cause of action was the Bernard Madoff created a ponzi scheme by taking money from investors and putting it in his pocket instead of investing it. He paid initial investors with money he collected from more recent victims of his scheme. His downfall came when many people attempted to close their accounts with him and he did not have enough cash coming in to pay them all at once.
Key facts: Bernard Madoff continued to obtain money from investors over a number of years always paying the oldest clients with money obtained from the newest clients. In 1997 Madoff allegedly begins a new option strategy- broad based portfolio of S&P securities and hedged with derivatives. Many companies use Madoff exclusively to invest their portfolios starting in the early 1980’s and continuing on through 2009 when he was charged with fraud. In 2008 Madoff pushes one of those investing companies to raise more money for his brokerage firm. Also in 2008 he tells his wife to transfer money from a brokerage acct to her own personal bank acct after telling his sons he is facing 7 billion dollars in redemptions. In Dec 2008 Madoff allegedly confesses to his sons the night before turning himself in to face charges. In 2009 Madoff was caught trying to mail jewelry and watches worth millions to family and friends in an effort to keep as much money as he could. Madoff pled guilty on June 15, 2009
Irrelevant Facts: Bernard Madoff opened his own securities company in 1960. Harry Markopolis submitted an 8 page memorandum to the SEC. The memorandum outlined the fraud and giving clear red flags to the SEC in 2000. The SEC ignored the memorandum stating there was no fraud. In October and November 2005 Markopolis again attempted to notify the SEC of the fraud and was unsuccessful. Markopolis again emails members of the SEC in 2007 to alert them to fraud on the part of Bernard