It’s becoming harder to see a honest person in Wall Street. Even the former Nasdaq chairman is involved in rogue ponzi scheme that duped $50 billion from investors. fifty billions dollars! Probably this is the largest fraud in ponzi scams.

Bernard Madoff was the chairman of Nasdaq stock exchange. He was well respected in financial community. People like Sen. Frank Lautenberg, Real estate magnate Mortimer Zuckerman, Movie director Steven Spielberg, DreamWorks Animation SKG Inc. Chief Executive Jeffrey Katzenberg and Nobel laureate Elie Wiesel trusted him. Billionaire Carl Shapiro believed in Madoff’s integrity and trusted him with $500 million+.

Bernard Madoff tricked all of them and the financial institutions’ regulators. He effectively ran a ponzi scheme to pay high returns to his investors.The beauty of this is that even the most skilled investors didn’t doubt Madoff’s investing methodologies.

Wall Street Journal reports that Madoff played the options game. He claimed that he sold and bought thousands of option contracts per day. But, the total number of option contract transactions, carried out in the exchange in that time period, was far less than what he claimed to trade. Some investors may get the money back because of SIPC insurance. SIPC covers upto $500,000 per customer. If someone lost $500 million+ in Madoff’s fraud, it would be hard to get anything back.

In 2000, Madoff served on the government’s Advisory Committee on Market Information, established to protect investors by ensuring accurate and full public disclosure of information to them. He was just an advisor. Advisors don’t need to follow their own advice, I guess.

Related Link: Fund manager in the scandal