Wall Street Insider Proves the World is Ripe for a Ponzi Scheme

Bernard Madoff, Wall Street insider, former chairman of the Nasdaq Stock Market, founder of Bernard L. Madoof Investment Securities LLC, and hedge fund manager, is apparently little more than a con artist who ran a Ponzi scheme to perfection for years. Madoff was "found out" recently and arrested yesterday for allegedly operating a $50 Billion scheme that would likely rank as one of the largest fraud cases ever. On Wednesday, Madoff told senior employees at his firm that "it’s all just one big lie" and that the hedge fund was "basically, a giant Ponzi scheme."

Asked about the fund, Madoff replied, "There is no innocent explanation," further noting that he had paid investors with money that wasn’t there. In addition to criminal charges, the Securities and Exchange Commission (SEC) has filed separate civil suits against Madoff. According to Scott Friedstad, the SEC’s deputy enforcer, "Our complaint alleges a stunning fraud – both in terms of scope and duration. We are moving quickly and decisively to stop the scheme and protect the remaining assets for investors."

In the other corner, Dan Horwitz, Madoff’s attorney, said, "Bernard Madoff is a longstanding leader in the financial services industry. We will fight to get through this unfortunate set of events." Indeed. Amidst an already skittish economy, the expectation is now that money will start to flow heavily out of hedge funds and Doug Kass, president of hedge fund Seabreeze Partners Management, noted, "This is a major blow to confidence that is already shattered – anyone on the fence will probably try to take their money out."