Bernie Madoff’s Ponzi scheme was arguably one of the biggest financial frauds in recent history. In December 2008, he was arrested after managing to swindle an estimated $65 billion from thousands of individuals and organizations across the world. Disturbing as it may sound, Bernie Madoff had managed to fool even some of the most savvy and respected investors in the game before his fall. How did he manage to hoodwink so many people?
It started with a small stock trading firm launched by Bernie Madoff in 1960 after working at his father-in-law’s accounting firm in Manhattan. In the following years, Madoff rose to prominence as a financier – head of the SEC’s New York office in the mid-80s and NASDAQ chairman in 1990, using his contacts and access to industry trade groups to gain credibility and build a powerful network.
By this time, he had already initiated his Ponzi scheme – he would find investors and collect their money which they believed were going into stock market trading. Instead, these funds went towards funding his lavish lifestyle illegally. To pay back existing investors, he shifted money from new investments. The scam went undetected for decades due to its cleverly crafted facade of legitimacy and sheer greed from those investing with him – members of European royalty, big Hollywood stars and producers, prestigious financial institutions around the world as well as many regular people who put savings or retirement money into funds investing with Madoff.
The scheme eventually unraveled when people began pulling out their investments due to the global financial crisis occurring at that time, leaving Bernie unable to pay them back any longer. Once discovered by law enforcement authorities, it was revealed that there were numerous red flags throughout his dealings which had gone unnoticed for all these years – including 24 pointed out by mathematician Harry Markopolos who spent eight years trying to inform the SEC about what was going on, only for no one to take notice.
This incredible story is captured in detail in HBO’s ‘The Wizard Of Lies’ documentary focusing on Bernie Madoff’s life story before and after being convicted of fraud charges. It is an eye opening watch that highlights how easily we can be deceived if we turn a blind eye towards suspicions and trust too much without doing our due diligence beforehand. We encourage you to watch ‘The Wizard Of Lies’ documentary available on HBO Max for free today!
