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68-546: After leaving the magazine, former managing editor Michael Ocrant said that he and the magazine's staff were misled by industry insiders regarding several accounts, including Bernie Madoff's . He was one of the first journalists to try to warn about the returns from Madoff in the MARHedge letter published in May 2001. The magazine was involved in several large audits of the hedge fund industry, as well as reporting on other major events in

136-432: A broker-dealer for penny stock with $ 5,000 (equivalent to $ 51,000 in 2023) that he earned from working as a lifeguard and irrigation sprinkler installer, and a loan of $ 50,000 from his father-in-law, accountant Saul Alpern, who referred a circle of friends and their families. Carl J. Shapiro was one such early customer, investing $ 100,000. Initially, the firm made markets ( quoted bid and ask prices) via

204-465: A penny stock brokerage in 1960, which eventually grew into Bernard L. Madoff Investment Securities. He served as the company's chairman until his arrest on December 11, 2008. That year, the firm was the 6th-largest market maker in S&;P 500 stocks. While the stock brokerage part of the business had a public profile, Madoff tried to keep his asset management business low profile and exclusive. At

272-646: A sole proprietorship , the Madoff firm incorporated in 2001 as a limited liability company with Madoff as the sole shareholder. The firm functioned as a third market trading provider, bypassing exchange specialist firms by directly executing orders over the counter from retail brokers. At one point, Madoff Securities was the largest market maker at the Nasdaq, and in 2008 was the sixth-largest market maker in S&P 500 stocks. The firm also had an investment management and advisory division, which it did not publicize, that

340-553: A 1986 graduate of the University of Michigan , and Andrew (1966–2014), a 1988 graduate of University of Pennsylvania 's Wharton Business School . Both sons later worked in the trading section alongside paternal cousin Charles Weiner. Several family members worked for Madoff. His younger brother, Peter, an attorney, was senior managing director and chief compliance officer, and Peter's daughter, Shana Madoff , also an attorney,

408-455: A 55-foot (17 m) sportfishing yacht named Bull . All three of his homes were auctioned by the U.S. Marshals Service in September 2009. Sheryl Weinstein, former chief financial officer of Hadassah , disclosed in a memoir that she and Madoff had had an affair more than 20 years earlier. As of 1997, when Weinstein left, Hadassah had invested a total of $ 40 million with Bernie Madoff. By

476-700: A Madoff victim. Members of the Madoff family have served as leaders of the Securities Industry and Financial Markets Association (SIFMA), the primary securities industry organization. Bernard Madoff served on the board of directors of the Securities Industry Association, a precursor of SIFMA, and was chairman of its trading committee. He was a founding board member of the Depository Trust & Clearing Corporation (DTCC) subsidiary in London,

544-545: A court filing from his lawyer in February 2020, it was revealed Madoff had chronic kidney failure. On February 17, 2022, Madoff's sister, Sondra Weiner, and her husband, Marvin, were both found dead with gun wounds in their Boynton Beach, Florida home. The deaths of Sondra, 87, and Marvin, 90, were labeled by police as a potential murder-suicide . From 1991 to 2008, Bernie and Ruth Madoff contributed about $ 240,000 to federal candidates, parties, and committees, including $ 25,000

612-705: A customary pre-sentencing letter to the judge requesting a sentence of 12 years, because of tables from the Social Security Administration that his life span was predicted to be 13 years. On June 26, 2009, Chin ordered forfeiture of $ 170 million in Madoff's assets. Prosecutors asked Chin to sentence Madoff to 150 years in prison. Bankruptcy Trustee Irving Picard indicated that "Mr. Madoff has not provided meaningful cooperation or assistance." In settlement with federal prosecutors, Madoff's wife Ruth agreed to forfeit her claim to $ 85 million in assets, leaving her with $ 2.5 million in cash. The order allowed

680-772: A decline in the quality of medical care. A 2023 NPR investigation found that from 2009-2020, roughly a quarter of all deaths in federal prisons occurred at the Butner Federal Correctional Complex . Due to bureaucratic delays in diagnoses and referrals, prisoners often arrive at FMC Butner with terminal conditions, only eligible for palliative care and compassionate release , despite the 1976 US Supreme Court case Estelle v. Gamble guaranteeing prisoners Eighth Amendment rights against deliberate indifference to their medical needs. Furthermore, vacancies in over 20% of nurse and paramedic positions at FMC Butner were linked to staff shortages and burnout. In 2009,

748-474: A giant Ponzi scheme." According to their attorney, Madoff's sons then reported their father to federal authorities. Madoff had intended to wind up his operations over the remainder of the week before having his sons turn him in; he directed DiPascali to use the remaining money in his business account to cash out the accounts of several family members and favored friends. However, as soon as they left their father's apartment, Mark and Andrew immediately contacted

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816-522: A lawyer, who in turn got them in touch with federal prosecutors and the SEC. On December 11, 2008, Madoff was arrested and charged with securities fraud . Madoff posted $ 10 million bail in December 2008 and remained under 24-hour monitoring and house arrest in his Upper East Side penthouse apartment until his guilty plea on March 12, 2009. On that date, Judge Denny Chin revoked his bail and remanded him to

884-472: A manager in the early 1990s, "I need the ability to give any settlement date I want." In some cases, returns were allegedly determined before the account was even opened. On a daily basis, DiPascali and his team on the 17th floor of the Lipstick Building , where the scam was based (Madoff's brokerage was based on the 19th floor, while the main entrance and conference room were on the 18th floor), watched

952-439: A practice that continued after Avellino and Bienes took over the firm in the 1970s. Avellino returned the money to investors and the SEC closed the case. In 2004, Genevievette Walker-Lightfoot , a lawyer in the SEC's Office of Compliance Inspections and Examinations (OCIE), informed her supervisor branch chief Mark Donohue that her review of Madoff found numerous inconsistencies, and recommended further questioning. However, she

1020-663: A ranch house through the 1970s. In 1980, he purchased an ocean-front residence in Montauk, New York , for $ 250,000. His primary residence was on Manhattan 's Upper East Side , and he was listed as chairman of the building's co-op board. He also owned a home in France and an 8,700-square-foot house in Palm Beach, Florida , where he was a member of the Palm Beach Country Club, where he searched for targets of his fraud. Madoff owned

1088-463: A redemption payment on November 19. However, despite cash infusions from several longtime investors, by the week after Thanksgiving it was apparent that there was not enough money to even begin to meet the remaining requests. His Chase account had over $ 5.5 billion in mid-2008, but by late November was down to $ 234 million, not even a fraction of the outstanding redemptions. With banks having all stopped lending, Madoff knew he could not even begin to borrow

1156-510: A related case, was reportedly assisting in the investigation. According to a civil lawsuit filed in October 2009, trustee Irving Picard alleges that Peter Madoff deposited $ 32,146 into his Madoff accounts and withdrew over $ 16 million; Andrew deposited almost $ 1 million into his accounts and withdrew $ 17 million; Mark deposited $ 745,482 and withdrew $ 18.1 million. Bernard lived in Roslyn, New York , in

1224-466: A study conducted by psychologists Michael Bourke and Andres Hernandez was published in the Journal of Family Violence . The results suggested a strong link between viewing child pornography and sexual abuse. The findings went against the conventional and widely held belief that a person passively viewing child pornography had an insignificant causal link with that person actually molesting a child. In what

1292-597: A year from 2005 through 2008 to the Democratic Senatorial Campaign Committee . The committee returned $ 100,000 of the Madoffs' contributions to Irving Picard , the bankruptcy trustee who oversees all claims, and Senator Chuck Schumer returned almost $ 30,000 received from Madoff and his relatives to the trustee. Senator Chris Dodd donated $ 1,500 to the Elie Wiesel Foundation for Humanity,

1360-715: Is a United States federal prison opened in 1995 in North Carolina for male inmates of all security levels who have special health needs. It is part of the Butner Federal Correctional Complex and is operated by the Federal Bureau of Prisons , a division of the United States Department of Justice . An adjacent satellite prison camp houses minimum-security male inmates. It is located in Mangum Township , Durham County, North Carolina , near Butner . FMC Butner

1428-421: Is known as the "Butner Study," Bourke and Hernandez analyzed data on 155 men convicted of child pornography offenses, who took part in an 18-month treatment program between 2002 and 2005, during which the men filled out assessment measures including a "victims list," where they revealed the number of children they had molested in the past. 74% of the men denied molesting anyone when they were sentenced. However, by

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1496-524: Is located near the Research Triangle area of Durham, Raleigh, and Chapel Hill. FMC Butner has a full hospital facility specializing in oncology and behavioral science. Many medical and surgical specialties hold clinics and perform procedures at the FMC. It has the only residential program devoted to the treatment of individuals convicted of sexual offenses in the federal prison system. In 2009 Philip Fornaci,

1564-500: Is that the use of a population of participants in the most intensive sex offender treatment program offered in the federal prison system skewed the sample. Offenders had to have received at least a thirty-six-month sentence to be eligible for the program. Melissa Hamilton argues, "These offenders may well, then, have represented particularly dangerous offenders who were a high risk to children since they had been prosecuted, convicted, given more than minimal prison sentences, and accepted into

1632-732: The Metropolitan Correctional Center pending sentencing. Chin ruled that Madoff was a flight risk because of his age, his wealth, and the prospect of spending the rest of his life in prison. Prosecutors filed two asset forfeiture pleadings which include lists of valuable real and personal property as well as financial interests and entities owned or controlled by Madoff. Madoff's lawyer, Ira Sorkin , filed an appeal , which prosecutors opposed. On March 20, 2009, an appellate court denied Madoff's request to be released from jail and returned to home confinement until his sentencing on June 29, 2009. On June 22, 2009, Sorkin hand-delivered

1700-641: The National Quotation Bureau 's Pink Sheets . In order to compete with firms that were members of the New York Stock Exchange trading on the stock exchange's floor, his firm began using innovative computer information technology to disseminate its quotes. After a trial run, the technology that the firm helped to develop became the National Association of Securities Dealers Automated Quotations Stock Market ( Nasdaq ). After 41 years as

1768-412: The asset management unit of his firm was a massive Ponzi scheme, and quoted him as saying that it was "one big lie". The following day, agents from the Federal Bureau of Investigation arrested Madoff and charged him with one count of securities fraud . The U.S. Securities and Exchange Commission (SEC) had previously conducted multiple investigations into his business practices but had not uncovered

1836-643: The International Securities Clearing Corporation. Madoff's brother Peter served two terms as a member of SIFMA's board of directors. He and Andrew received awards from SIFMA in 2008 for "extraordinary leadership and service". He resigned from the board of directors of SIFMA in December 2008, as news of the Ponzi scheme broke. From 2000 to 2008, the Madoff brothers donated $ 56,000 directly to SIFMA, and paid additional money as sponsors of industry meetings. Bernard Madoff's niece Shana Madoff

1904-748: The SEC and Court appointed trustee Irving Picard to pursue Ruth Madoff's funds. Massachusetts regulators also accused her of withdrawing $ 15 million from company-related accounts shortly before he confessed. In February 2009, Madoff reached an agreement with the SEC. It was later revealed that as part of the agreement, Madoff accepted a lifetime ban from the securities industry. Picard sued Madoff's sons, Mark and Andrew, his brother Peter, and Peter's daughter, Shana, for negligence and breach of fiduciary duty, for $ 198 million. The defendants had received over $ 80 million in compensation since 2001. According to an SEC indictment, office workers Annette Bongiorno and Joann Crupi created false trading reports based on

1972-586: The SEC investigators doubted whether Madoff was even trading. Due to concerns of improper conduct by Inspector General Kotz in the Madoff investigation, Inspector General David C. Williams of the United States Postal Service was brought in to conduct an independent outside review. The Williams Report questioned Kotz's work on the Madoff investigation, because Kotz was a "very good friend" of Markopolos. Investigators were not able to determine when Kotz and Markopolos became friends. A violation of

2040-438: The SEC was criticized for its lack of financial expertise and lack of due diligence , despite having received complaints from Harry Markopolos and others for almost a decade. The SEC's inspector general, Kotz, found that since 1992, there had been six investigations of Madoff by the SEC, which were botched either through incompetent staff work or by neglecting allegations of financial experts and whistle-blowers. At least some of

2108-607: The Women's Zionist Organization of America , the Elie Wiesel Foundation and Steven Spielberg 's Wunderkinder Foundation. Jewish federations and hospitals lost millions of dollars, forcing some organizations to close. The Lappin Foundation , for instance, was forced to close temporarily because it had invested its funds with Madoff. David Sheehan, chief counsel to trustee Picard, stated on September 27, 2009, that about $ 36 billion

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2176-647: The amount he "managed" became known, investors would question whether he could trade on the scale he claimed without the market reacting to his activity, or whether there were enough options to hedge his stock purchases. As early as 2001, Harry Markopolos discovered that in order for Madoff's strategy to be possible, he would have had to buy more options on the Chicago Board Options Exchange than actually existed. Additionally, at least one hedge-fund manager, Suzanne Murphy, revealed that she balked at investing with Madoff because she did not believe there

2244-425: The closing price of the S&P 100 . They then picked the best-performing stocks and used them to create bogus "baskets" of stocks as the basis for false trading records, which Madoff claimed were generated from his supposed " split-strike conversion " strategy, in which he bought blue-chip stocks and took options contracts on them. They frequently made their "trades" at a stock's monthly high or low, resulting in

2312-591: The director of the DC Prisoners' Project, stated that FMC Butner, along with FMC Carswell and FMC Rochester , "are clearly the 'gold standard' in terms of what BOP facilities can achieve in providing medical care" and that they had provided "excellent medical care, sometimes for extremely complex medical needs." However, in 2021, the Bureau of Prison's accreditation from the Joint Commission lapsed, raising concerns of

2380-529: The end of 2008, Hadassah had withdrawn more than $ 130 million from its Madoff accounts and contends its accounts were valued at $ 90 million at the time of Madoff's arrest. At the victim impact sentencing hearing, Weinstein testified, calling him a "beast". According to a March 13, 2009, filing by Madoff, he and his wife were worth up to $ 126 million, plus an estimated $ 700 million for the value of his business interest in Bernard L. Madoff Investment Securities LLC. On

2448-403: The end of treatment, 85% had admitted to sexually molesting a child at least once. The numbers are more than twice that of other studies. In explaining this discrepancy, Bourke said, "Our treatment team worked for an average of 18 months with each offender, and the environment was one of genuine therapeutic trust" that encouraged the men to tell the truth about themselves. A critique of the study

2516-566: The ethics rule would have taken place if the friendship were concurrent with Kotz's investigation of Madoff. In 1999, financial analyst Harry Markopolos had informed the SEC that he believed it was legally and mathematically impossible to achieve the gains Madoff claimed to deliver. According to Markopolos, it took him four minutes to conclude that Madoff's numbers did not add up, and another minute to suspect they were fraudulent. After four hours of failed attempts to replicate Madoff's numbers, Markopolos believed he had mathematically proven Madoff

2584-555: The firm, he employed his brother Peter Madoff as senior managing director and chief compliance officer, Peter's daughter Shana Madoff as the firm's rules and compliance officer and attorney, and his now-deceased sons Mark Madoff and Andrew Madoff . Peter was sentenced to 10 years in prison in 2012, and Mark hanged himself in 2010, exactly two years after his father's arrest. Andrew died of lymphoma on September 3, 2014. On December 10, 2008, Madoff's sons Mark and Andrew told authorities that their father had confessed to them that

2652-642: The fraud much earlier than late 2008 when he was finally arrested in New York . The Federal Bureau of Investigation report and federal prosecutors' complaint says that during the first week of December 2008, Madoff confided to a senior employee, identified by Bloomberg News as one of his sons, that he said he was struggling to meet $ 7 billion in redemptions. For years, Madoff had simply deposited investors' money in his business account at JPMorgan Chase and withdrew money from that account when they requested redemptions. He had scraped together just enough money to make

2720-631: The fraud was well under way as early as 1964. Reportedly, Madoff told an acquaintance soon after his arrest that the fraud began "almost immediately" after his firm opened its doors. Bongiorno, who spent over 40 years with Madoff–longer than anyone except Ruth and Peter–told investigators that she was doing "the same things she was doing in 2008" when she first joined the firm. Madoff targeted wealthy American Jewish communities, using his in-group status to obtain investments from Jewish individuals and institutions. Affected Jewish charitable organizations considered victims of this affinity fraud include Hadassah,

2788-455: The government, the industry, and the press about Madoff's fraud. Although Madoff's wealth management business ultimately grew into a multibillion-dollar operation, none of the major derivatives firms traded with him because they did not believe his numbers were real. None of the major Wall Street firms invested with him, and several high-ranking executives at those firms suspected his operations and claims were not legitimate. Others contended it

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2856-402: The high "returns" that they touted to customers. On occasion, they slipped up and dated trades as taking place on weekends and federal holidays, though this was never caught. Over the years, Madoff admonished his investors to keep quiet about their relationship with him. This was because he was well aware of the finite limits that existed for a legitimate split-strike conversion. He knew that if

2924-499: The industry, such as the creation of Hedge Funds Care , a charity created with the aim of ending child abuse . This business magazine or journal-related article is a stub . You can help Misplaced Pages by expanding it . See tips for writing articles about magazines . Further suggestions might be found on the article's talk page . Bernie Madoff Bernard Lawrence Madoff ( / ˈ m eɪ d ɔː f / MAY -dawf ; April 29, 1938 – April 14, 2021)

2992-441: The massive fraud. On March 12, 2009, Madoff pleaded guilty to 11 federal felonies and admitted to turning his wealth management business into a massive Ponzi scheme. The Madoff investment scandal defrauded thousands of investors of billions of dollars. Madoff said that he began the Ponzi scheme in the early 1990s, but an ex-trader admitted in court to faking records for Madoff since the early 1970s. Those charged with recovering

3060-458: The missing money believe that the investment operation may never have been legitimate. The amount missing from client accounts was almost $ 65 billion, including fabricated gains. The Securities Investor Protection Corporation (SIPC) trustee estimated actual direct losses to investors of $ 18 billion, of which $ 14.418 billion has been recovered and returned, while the search for additional funds continues. On June 29, 2009, Madoff

3128-456: The money he needed. On December 3, he told longtime assistant Frank DiPascali , who had overseen the fraudulent advisory business, that he was finished. On December 9, he told his brother Peter about the fraud. According to the sons, Madoff told Mark Madoff on the following day, December 9, that he planned to pay out $ 173 million in bonuses two months early. Madoff said that "he had recently made profits through business operations, and that now

3196-517: The morning of December 11, 2010 – exactly two years after Bernard's arrest – his son Mark was found dead in his New York City apartment. The city medical examiner ruled the cause of death as suicide by hanging . During a 2011 interview on CBS , Ruth Madoff claimed she and her husband had attempted suicide after his fraud was exposed, both taking "a bunch of pills" in a suicide pact on Christmas Eve 2008. In November 2011, former Madoff employee David Kugel pleaded guilty to charges that arose out of

3264-484: The payments as a normal business practice: If your girlfriend goes to buy stockings at a supermarket, the racks that display those stockings are usually paid for by the company that manufactured the stockings. Order flow was an issue that attracted a lot of attention but was grossly overrated. Madoff was active with the National Association of Securities Dealers (NASD), a self-regulatory securities-industry organization. He served as chairman of its board of directors, and

3332-400: The requested funds," he told the court. Madoff maintained that he began his fraud in the early 1990s, though prosecutors believed it was underway as early as the 1980s. DiPascali, for instance, told prosecutors that he knew at some point in the late 1980s or early 1990s that the investment advisory business was a sham. An investigator charged with reconstructing Madoff's scheme believes that

3400-475: The returns that Madoff ordered for each customer. For example, when Madoff determined a customer's return, one of the back office workers would enter a false trade report with a previous date and then enter a false closing trade in the amount required to produce the required profit, according to the indictment. Prosecutors allege that Bongiorno used a computer program specially designed to backdate trades and manipulate account statements. They quote her as writing to

3468-572: The right questions. He said "They never even looked at my stock records," and that it "would've been easy for them to see" if they'd checked with the Depository Trust Company ; "if you're looking at a Ponzi scheme, it's the first thing you do." Madoff said in the June 17, 2009, interview that SEC Chairman Mary Schapiro was a "dear friend", and SEC Commissioner Elisse Walter was a "terrific lady" whom he knew "pretty well". After Madoff's arrest,

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3536-449: The scheme. He admitted having helped Madoff create a phony paper trail, the false account statements that were supplied to clients. Madoff had a heart attack in December 2013, and reportedly had end-stage renal disease (ESRD). According to CBS New York and other news sources, Madoff claimed in an email to CNBC in January 2014 that he had kidney cancer , but this was unconfirmed. In

3604-517: The two married. A spokesman for Swanson said he "did not participate in any inquiry of Bernard Madoff Securities or its affiliates while involved in a relationship" with Shana Madoff. While awaiting sentencing, Madoff met with the SEC's inspector general , H. David Kotz , who conducted an investigation into how regulators had failed to detect the fraud despite numerous red flags. Madoff said he could have been caught in 2003, but that bumbling investigators had acted like " Lt. Columbo " and never asked

3672-402: Was a fraud. He was ignored by the SEC's Boston office in 2000 and 2001, as well as by Meaghan Cheung at the SEC's New York office in 2005 and 2007 when he presented further evidence. He has since co-authored a book with Gaytri D. Kachroo, the leader of his legal team, titled No One Would Listen . The book details the frustrating efforts he and his legal team made over a ten-year period to alert

3740-427: Was a good time to distribute it." Mark told Andrew Madoff, and the next morning they went to their father's office and asked him how he could pay bonuses to his staff if he was having trouble paying clients. They then traveled to Madoff's apartment, where with Ruth Madoff nearby, Madoff told them he was "finished", that he had "absolutely nothing" left, and that his investment fund was "just one big lie" and "basically,

3808-599: Was a member of its board of governors . Madoff met Ruth Alpern while attending Far Rockaway High School and the two began dating. Ruth graduated from high school in 1958, and earned her bachelor's degree at Queens College . On November 28, 1959, Madoff married Alpern. She was employed at the stock market in Manhattan before working in Madoff's firm, and she founded the Madoff Charitable Foundation. Bernard and Ruth Madoff had two sons: Mark (1964–2010),

3876-448: Was a member of the executive committee of SIFMA's Compliance & Legal Division, but resigned shortly after the arrest. Madoff's name first came up in a fraud investigation in 1992, when two people complained to the SEC about investments they made with Avellino & Bienes, the successor to his father-in-law's accounting practice. For years, Alpern and two of his colleagues, Frank Avellino and Michael Bienes, had raised money for Madoff,

3944-463: Was actually invested by customers. $ 7.6 billion has been recovered, but pending lawsuits, only $ 2.6 billion was available to repay victims. The Internal Revenue Service ruled that investors' capital losses in this and other fraudulent investment schemes would be treated as business losses, thereby allowing the victims to claim a tax deduction for such losses. Federal Medical Center, Butner The Federal Medical Center, Butner ( FMC Butner ),

4012-450: Was an American financial criminal and financier who was the admitted mastermind of the largest known Ponzi scheme in history, worth an estimated $ 65 billion. He was at one time chairman of the Nasdaq stock exchange. Madoff's firm had two basic units: a stock brokerage and an asset management business; the Ponzi scheme was centered in the asset management business. Madoff founded

4080-512: Was diagnosed with mantle cell lymphoma and eventually returned to work. He was named chairman of the Lymphoma Research Foundation in January 2008, but resigned shortly after his father's arrest. Peter Madoff (and Andrew Madoff, before his death) remained the targets of a tax fraud investigation by federal prosecutors, according to The Wall Street Journal . David Friehling , Bernard Madoff's tax accountant, who pleaded guilty in

4148-460: Was enough volume to support his purported trading activity. Madoff admitted during his March 2009 guilty plea that the essence of his scheme was to deposit client money into a bank account, rather than invest it and generate steady returns as clients had believed. When clients wanted their money, "I used the money in the Chase Manhattan bank account that belonged to them or other clients to pay

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4216-425: Was inconceivable that the growing volume of Madoff's accounts could be competently and legitimately serviced by his documented accounting/auditing firm, a three-person firm with only one active accountant. The Central Bank of Ireland failed to spot Madoff's gigantic fraud when he started using Irish funds and had to supply large amounts of information, which would have been enough to enable Irish regulators to uncover

4284-435: Was invested into the scam, returning $ 18 billion to investors, with $ 18 billion missing. About half of Madoff's investors were "net winners", earning more than their investment. The withdrawal amounts in the final six years were subject to "clawback" (return of money) lawsuits. In a May 4, 2011, statement, trustee Picard said that the total amount owed to customers (with some adjustments) was $ 57 billion, of which $ 17.3 billion

4352-613: Was sentenced to 150 years in prison, the maximum sentence allowed. On April 14, 2021, he died at the Federal Medical Center, Butner , in North Carolina , from chronic kidney disease . Madoff was born on April 29, 1938, in Queens , New York City , to Sylvia (Muntner) and Ralph Madoff, who was a plumber and stockbroker . His family was Jewish . Madoff's grandparents were emigrants from Poland, Romania, and Austria. He

4420-643: Was the firm's compliance attorney. Over the years, Madoff's sons had borrowed money from their parents, to purchase homes and other property. Mark Madoff owed his parents $ 22 million, and Andrew Madoff owed them $ 9.5 million. There were two loans in 2008 from Bernard Madoff to Andrew: $ 4.3 million on October 6, and $ 250,000 on September 21. Andrew owned a Manhattan apartment and a home in Greenwich, Connecticut , as did his brother Mark, prior to his death. Both sons used outside investment firms to run their own private philanthropic foundations. In March 2003, Andrew Madoff

4488-401: Was the focus of the fraud investigation. Madoff was "the first prominent practitioner" of payment for order flow , in which a dealer pays a broker for the right to execute a customer's order. This has been called a "legal kickback ". Some academics have questioned the ethics of these payments. Madoff argued that these payments did not alter the price that the customer received. He viewed

4556-742: Was the second of three children; his siblings are Sondra Weiner and Peter Madoff. Madoff graduated from Far Rockaway High School in 1956. Madoff attended the University of Alabama for one year, where he became a brother of the Tau Chapter of the Sigma Alpha Mu fraternity, then transferred to and graduated from Hofstra University in 1960 with a Bachelor of Arts in political science . Madoff briefly attended Brooklyn Law School , but left after his first year to start Bernard L. Madoff Investment Securities LLC and work for himself. In 1960, Madoff founded Bernard L. Madoff Investment Securities LLC as

4624-421: Was told by Donohue and his boss Eric Swanson to stop work on the Madoff investigation, send them her work results, and instead investigate the mutual fund industry. Swanson, assistant director of the SEC's OCIE, had met Shana Madoff in 2003 while investigating her uncle Bernie Madoff and his firm. The investigation was concluded in 2005. In 2006, Swanson left the SEC and became engaged to Shana Madoff, and in 2007

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