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Madoff's Traders Were In Decline
Despite dramatic drops in revenue and profits at Madoff's original stock trading business in recent years, the firm continued to raise staff pay, according to documents reviewed by The Wall Street Journal.

The Fraud Case

New York Subpoenas Merkin
New York's attorney general issued subpoenas to former GMAC Financial Services Chairman J. Ezra Merkin, three of his funds and 15 nonprofits in his probe of alleged frauds on charities in the Bernard Madoff scandal.
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Madoff Strategy Put to Test
According to a study by Credit Suisse, the tactics that Madoff purported to use would have generated an annual average return of 8.6%, beating the S&P 500.
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Cohmad, Jaffe Draw Closer Look
Regulators probing the Madoff case are intensifying pressure on Cohmad Securities after an executive, Robert Jaffe, failed to testify in front of Massachusetts officials.
- Video: Connecticut town loses Millions with Madoff
Judge Rejects Bid to Jail Madoff
A federal judge denied another bid by prosecutors to jail disgraced financier Bernard Madoff pending trial.
- Cohmad, Jaffe Draw Closer Look
- Inside a Swiss Bank, Madoff Warnings
- Complete Coverage: News, victims list, more
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Swiss Bank Missed Warnings on Madoff
Swiss bank UBP put hundreds of millions of clients' money in Madoff's alleged Ponzi scheme, despite researchers' skepticism.
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PBGC Stakes Claim in Bankruptcy Case
The PBGC identified itself as a creditor in the liquidation of Madoff's firm, suggesting the pension agency is preparing for bankruptcies by companies in the wake of an alleged $50 billion Ponzi scheme.
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Giant Bank in Probe Over Ties to Madoff
Spanish prosecutors are probing how one of Europe's largest banks, Banco Santander, lost more than $3.1 billion for clients by investing with Madoff.
- Madoff Stays Free on Bail
- Discuss: Do you agree with the judge's decision?
- Complete Coverage: Bernard Madoff
Madoff to Remain Free
A federal judge denied prosecutors' request to jail money manager Bernard Madoff for allegedly violating a court order by mailing more than $1 million worth of valuables to friends and family.
- Judge's Jan. 12 order (From FindLaw)
- Discuss: Do you agree with the decision?
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Madoff Prosecutors Push Back Deadline
The federal deadline to bring charges against Bernard Madoff has been extended to mid-February.
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Madoff Brother, at Arm's Length?
Investigators in the Madoff case are scrutinizing whether there was a role played in the alleged scheme by others with close ties to Bernard Madoff over the years, including his brother – and No. 2 -- Peter and other family members.
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Madoff Faces Jail for Violating Order
A federal magistrate judge is expected to announce Monday if Bernard Madoff must go to jail for violating the terms of a court order freezing his assets.
- Complete Coverage: Bernard Madoff
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U.S.: Madoff Had $173 Million in Checks
Investigators found signed checks totaling more than $173 million in Madoff's desk following his arrest.
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New Ponzi Case Pursued
The CFTC and the SEC brought civil charges against Joseph S. Forte, a Pennsylvania man accused of running a $50 million Ponzi scheme.
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Prosecutors: Madoff Is a 'Danger'
Bernard Madoff poses a "danger," argued federal prosecutors, who said the Ponzi-scheme figure should go to jail after he mailed valuables to friends and family.
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Madoff Tried to Stave Off Firm's Crash
Days before Madoff's arrest he received $250 million from a Wall Street mentor, showing how the investment manager tried to raise cash to stave off his firm's collapse.
- Heard: When Selected, Be Selective
- Complete Coverage: News, victims list, more
Watchdog Eyes SEC's Shortcomings
The SEC watchdog said he plans to broaden his investigation by examining whether or not the SEC as a whole is effective in its oversight of the financial markets. (Kotz testimony)
Madoff Chasers Dug for Years, to No Avail
Madoff's firm was examined at least eight times in 16 years by various agencies, who never came close to uncovering his alleged scheme.
- 2005 Letter From Markopolos to SEC Outlining Concerns
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Madoff Provides Details of Assets
Bernard Madoff gave authorities a list of assets, but investigators have yet to determine where all the money in an alleged Ponzi scheme went.
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Madoff Liquidation Trustee Gets Funds
A bankruptcy judge approved the transfer of $28.1 million to cover expenses tied to the liquidation of Bernard Madoff's investment firm.
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UBP Scrambles to Explain Madoff Ties
Swiss bank UBP is scrambling to explain its ties to Madoff. Half of the bank's 22 funds of funds put money into Madoff-related vehicles.
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Financier's Fortune Led Investors to Madoff
Madoff used middlemen such as Thierry Magon de La Villehuchet to persuade others to invest in an alleged Ponzi scheme.
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Madoff 'Feeders' Under Focus
The investigation into Bernard Madoff is starting to turn to the middlemen who attracted billions of investment dollars to his funds.
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Madoff Created an
Air of Mystery
During a Wall Street career that began in 1960, Madoff attained fame and fortune with his connections, ingenious marketing and a carefully cultivated image.
Opinion and Commentary
Barron's: Assessing Madoff's Strategy
Elements of Bernie Madoff's options-based investment strategy may have merit -- if practiced by sound, honest investors.
Barron's: Funds of Funds -- Victims or Enablers?
Is everybody who lost money with Madoff truly a "victim?" Or should they have known better, especially while they where getting returns that were too good and too consistent to be true?
Opinion: Madoff and Markets
Shakespeare is a better investor guide than the SEC.
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Heard on the Street: Letting Madoff Slip Through the Net
The cops can't catch every crook, but a sophisticated financial system should be able to spot a multibillion-dollar Ponzi scheme operating in its midst for years.

Multimedia

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Circle of Friends
Bernard Madoff relied on a variety of outside entities to connect him with investors. A sample.
Teaching Wall Street a Lesson
WSJ's Evan Newmark and Dennis Berman say the Bernie Madoff scandal teaches investors that "nobody beats the market."
From Ponzi to Madoff
Bernard Madoff's alleged swindle is the latest of the kind made famous by Charles Ponzi in the 1920s.

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Q&A on the Madoff Case
The alleged fraud of Bernard Madoff roped in thousands of clients and potentially going back three decades, or longer. Here is a primer on the Madoff case so far.
The Impressionable Elites Get Snookered
Now we learn that the mother lode for con artists is not uninformed dowagers but the rarefied hedge fund managers of Wall Street and Greenwich, says Mark Penn.

Resources

- Department of Justice information for victims
- SEC Dec. 11, 2008 press release on Madoff
- U.S. attorney's statement on Madoff's arrest
- SEC complaint
- Criminal complaint
- Cox's Dec. 16 statement on SEC failures
- SEC inspector general's Jan. 5, 2009 testimony
Markopolos's Documents
- Documents Harry Markopolos submitted to the SEC in fall 2005, making a case that Bernard Madoff's business was a Ponzi scheme.
- The response Mr. Markopolos received from an SEC official in response to his case against Mr. Madoff.
- An email Mr. Markopolos sent to a SEC official in April 2008.
- See the SEC's case opening and closing recommendations.
Looking Back
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A Wall Street Mystery
In 1992, two accountants drew an SEC crackdown by promising investors hard-to-believe returns by turning the money over to be managed by an unnamed broker. The mystery broker: Bernard L. Madoff.

-- The Wall Street Journal -- Dec. 16, 1992
Don't Ask, Don't Tell
Bernie Madoff might as well hang that sign on his secretive hedge-fund empire. Even adoring investors can't explain his enviably steady gains.

-- Barron's -- May 7, 2001
Investor Fallout
Where Ezra Merkin Lost His Way
Last fall, money manager J. Ezra Merkin told a room full of value investors that he was "in the business of buying broken promises." Now, after Merkin revealed losses tied to Madoff, investors wonder how he ended up in this mess.
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Merkin Resigns as GMAC Chairman
J. Ezra Merkin resigned as GMAC chairman. He has come under a spotlight for investments with Madoff.
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For Mr. Balter, Madoff Effect Lingers On
The Madoff scandal has led many investors to lose faith in the entire hedge-fund industry, to the consternation of some of Madoff's former competitors.
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UBP Takes U.S. Hedge Funds to Task
A Swiss bank facing hefty losses in the alleged Ponzi scheme run by Madoff is threatening to pull several billion dollars of investments from large U.S. hedge funds.
Why We Keep Falling for Financial Scams
Psychologist Stephen Greenspan explores why investors continue to be swindled -- and how he came to lose part of his savings to Bernard Madoff.
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'Dr. Doom' Didn't Predict Madoff Blowup
Henry Kaufman, a former Salomon Brothers economist known as "Dr. Doom" for his bearish views, lost millions on Madoff investments.
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Latin Americans Quiet About Madoff Losses
Wealthy investors in Latin America appear to be among big losers in Madoff's alleged Ponzi scheme.
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Wiesel Foundation Invested $15 Million With Madoff
The Elie Wiesel Foundation said it invested $15.2 million or "substantially all" of its assets with Madoff.
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MassMutual Burned by Madoff
Tremont, a part of MassMutual, disclosed that its clients lost $3.3 billion as a result of Mr. Madoff's alleged $50 billion scam.
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Former Mayor Tells How He Was Lulled
Burt Ross, a former New Jersey mayor, believes he has lost about $5 million, the bulk of his net worth, investing with Madoff. His predicament casts light on how Madoff attracted affluent and apparently savvy investors.
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Unwelcome Eye on Geneva's Banks
The discreet world of Geneva finance has been rattled by the alleged Ponzi scheme run by Madoff, with banks reporting losses potentially running into the billions.
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Investors Unlikely to Get SIPC Relief
Investors who lost money with Bernard Madoff shouldn't count on the SIPC riding to their rescue.
- Video: Trouble With Madoff Books
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Spielberg and Katzenberg Get Hit
Gerald Breslauer, financial adviser to Steven Spielberg and Jeffrey Katzenberg, has been hit by the alleged fraud by Bernard Madoff.
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In Palm Beach, Investors Assume Worst
Madoff had clients around the world who now are reeling from the revelation that their money might be gone. But in Palm Beach, Fla., the damage is especially severe.
Fund Fraud Hits Big Names
International banks, hedge funds and wealthy private investors have emerged as potential victims of Madoff's alleged Ponzi scheme.
How Madoff Made People Look Dumb
Of all people, sophisticated investors like Madoff's clients should have known that if something sounds too good to be true, then it's not. But they believed it anyway. Why?

Victims List

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Investors exposed to losses include:
- Fred Wilpon, owner of New York Mets
- Norman Braman, former owner of Philadelphia Eagles
- Leonard Feinstein, co-founder of retailer Bed Bath & Beyond
- J. Ezra Merkin, GMAC chairman
- The Elie Wiesel Foundation for Humanity
- Sortable list of victims and their exposure

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