Madoffs

Madoffs refers to members of the Madoff family, most notably Bernard L. Madoff, an American financier whose 2008 confession revealed a decades-long Ponzi scheme. The surname is associated with Bernard Madoff and with the family’s involvement in two linked firms: Madoff Investment Securities LLC (often called Madoff Securities), a New York broker-dealer founded in 1960, and Bernard L. Madoff Investment Securities LLC’s investment advisory operation, which conducted most of the fraudulent activity.

From the 1990s until 2008, Bernard Madoff allegedly produced steady investment returns for clients, not through legitimate profits but by using money from new investors to pay existing clients. In December 2008, during the financial crisis, the scheme collapsed when redemptions overwhelmed the firm’s ability to honor them. Bernard Madoff pleaded guilty in 2009 to 11 federal felonies and was sentenced to 150 years in prison; he died in 2021 in prison.

The fraud caused extensive losses to investors. The schemes’ supporters often cite about 65 billion dollars in fabricated gains reported to clients, while the actual principal invested by customers was closer to 17 billion dollars. The case led to insolvency proceedings and the liquidation of assets, overseen by court-appointed trustee Irving Picard, who pursued recovery efforts for the benefit of victims.

Bernard Madoff’s sons, Mark Madoff and Andrew Madoff, worked at the firm and faced extensive media scrutiny, but were not charged with crimes. Mark died by suicide in 2010; Andrew died of cancer in 2014. The scandal prompted widespread discussion of due diligence, compliance, and regulatory reforms in the financial industry.