The horror stories
In today’s regulatory environment, it’s virtually impossible to violate the rules.
Bernie Madoff was sentenced to 150 years’ imprisonment in 2009 for running a massive Ponzi scheme. We’ll discuss the anatomy of Ponzi schemes in more detail in Chapter 3; in essence they are fraudulent schemes in which the fraudster pays investors their returns out of the money he is obtaining from new investors, rather than from genuine investment returns. Here’s the basic story of the Madoff affair: at the height of the US economic crisis in 2008 Bernie Madoff, a former chairman of NASDAQ (a major US stock market), was denounced to the authorities by his two sons for swindling a large number of investors, many ...