Madoff ran the largest Ponzi scheme in history — $64.8B, 150 years, 4,800 victims

Bernard Madoff founded his investment firm in 1960 and built it into one of Wall Street's most respected brokerages. He served as chairman of NASDAQ in the 1990s. But from at least the early 1990s, Madoff stopped actually trading. He deposited client money into a Chase Manhattan Bank account and paid withdrawals from that account, fabricating all returns with a fictional 'split-strike conversion' strategy. By 2008, his firm had 4,800 client accounts and $64.8 billion on paper.

The scheme collapsed in December 2008 when the financial crisis triggered a wave of redemptions Madoff could not cover. His sons Mark and Andrew reported him to federal authorities on 10 December 2008. The next day, FBI agents arrested Madoff at his Manhattan apartment. He admitted that 'it was all just one big lie.' The SEC had investigated Madoff at least eight times over 16 years but never uncovered the fraud, despite detailed warnings from whistleblower Harry Markopolos starting in 2000.

On 29 June 2009, Madoff was sentenced to 150 years in prison, the maximum allowed, with $170 billion in restitution. He remained in prison until his death in 2021. Court-appointed trustee Irving Picard recovered $19 billion in assets, including $7.2 billion from the Picower estate — the largest single forfeiture in US judicial history. About half of Madoff's direct investors lost no money, while others lost their life savings. The scandal triggered a major reform of SEC oversight.