Madoff sentenced to 150 years!
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Photo Credit: CNN.com
People in the courtroom cheered as Bernard Madoff was sentenced to 150 years in prison.
Bernard Madoff pulled off a Ponzi scheme (named after Charles Ponzi who became notorious for the scheme back in 1910) that defrauded people with billions of dollars in total. Some of them losing their retirements completely.
The scheme was to pay earlier investors with some type of interest using the money of new investors to get more people to invest. It acts like a chain until either the funds run out or new investors stop coming in.
The Madoff scandal of 2008 showed that investors presumed to be sophisticated, such as hedge fund managers and international bankers, can also be tricked into joining a Ponzi scheme by a promoter with a well-established (if spurious) reputation for financial skill. Claims of a “proprietary” investment strategy, which must be kept secret to ensure competitive edge, may also be used to hide the nature of the scheme. Bernard Madoff, for example, only permitted one accounting firm, run by his brother-in-law, to perform audits on his hedge fund, claiming the need to keep his strategy secret.
Read more at CNN.com
