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Bernard Lawrence Madoff ,born April 29, 1938, is an American businessman, and former chairman of the NASDAQ stock exchange. He founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960 and was its chairman until December 11, 2008, when he was charged with perpetrating what may be the largest investor fraud ever committed. He is free under house arrest until his indictment with a deadline of February 11, 2009.
At 8.30 a.m. December 11, 2008, Federal Bureau of Investigation agents arrested Madoff and charged him with one count of securities fraud. On the day prior to his arrest, Madoff told senior executives at the firm, which included his sons, that the management and advisory segment of the business was, "basically, a giant Ponzi scheme." Madoff was then arrested based on a tip-off from his sons, Andrew and Mark. Five days after his arrest, Madoff's assets and those of the firm were frozen and a receiver was appointed to handle the case. According to federal charges, Madoff himself admitted that his firm has "liabilities of approximately US$50 billion." Banks from outside the U.S. have announced that they have potentially lost billions in U.S. dollars as a result. Some investors, journalists and economists have questioned Madoff's statement that he alone is responsible for the large-scale operation, and investigators are looking to determine if there were others involved in the scheme.
Madoff's firm, which is in the process of liquidation, was one of the top market maker businesses on Wall Street (the sixth-largest in 2008), often functioning as a "third-market" provider that bypassed "specialist" firms and directly executed orders over the counter from retail brokers. The firm also encompassed an investment management and advisory division that is now the focus of the fraud investigation.
Other notable clients included former Salomon Brothers economist Henry Kaufman, actor Kevin Bacon and his wife, actress Kyra Sedgwick, as well as actor John Malkovich.