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The house of cards created by Madoff in early 1980 as his Ponzi style hedge fund company, which suppose to worth $50 billions collapsed on December 11, 2008 when FBI arrested him. Under a Ponzi scheme, which is similar to pyramid schemes, investors are promised very high returns on their investment, while in reality early investors are paid with money collected from later investors.

Madoff is almost legendary Wall Street fixture and his firm has played big role in the structure of Wall Street for decades in traditional and new electronic stock, equities and derivatives trading.

Madoff, former chairman of the Nasdaq was virtually an architect of the trading on the Street, and sat on several important boards of directors.

Madoff said that he had $200 million to $300 million left, out of what was supposed to be $17 billion under his hedge funds management company. Spain’s largest bank, Santander had $3.1bn invested in the Madoff’s firm run by Bernard Madoff, Fairfield Greenwich Group invested $7.3 billion, Kingate Management $2.8 billion, HSBC $1 billion, Ascot Partners, run by Jacob Ezra Merkin, GMAC’s chairman, most of its $1.8 billion in assets. Madoff’s case is likely to fuel uncertainty about the entire hedge fund industry and might be the largest fraud in Wall Street history.
Look at Wall St. Wizard Finds Magic Had Skeptics

listed: December 12, 2008

For years, investors, rivals and regulators all wondered how Bernard L. Madoff worked his magic. But on Friday, less than 24 hours after this prominent Wall Street figure was arrested on charges connected with what authorities portrayed as the biggest Ponzi scheme in financial history, hard questions began to be raised about whether Mr. Madoff acted alone and why his suspected con game was not uncovered sooner.

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