The person in charge of the major pyramidal fraud in all history he died this Wednesday in a prison in the United States, where he was serving a sentence of 150 years. Find out the keys, those affected by the case and how the former Nasdaq president was able to carry out the scam $ 64.8 billion.
(Read here: Bernie Madoff, creator of the world’s biggest scam, dies in prison)
What did Madoff do?
Financial institutions, high-ranking investors and millionaires from around the world were swindled by the magnate company, which positioned itself at the time as one of the best managers on Wall Street.
Madoff’s fraud was done with the fortune of large companies through the free investment fund.
This type of private group investment a bag employs highly sophisticated investment strategies and is managed by professional companies that charge commissions about the results.
What system did you use?
The Madoff pyramid stopped working when new investors stopped coming
The system used by the American was the pyramidal scam, Which basically consists of allocating the money from shareholders going into the fund to pay the last investors -those of greater profitability-.
The Madoff Pyramid, managed through his company Investment advice, Stopped working when new investors stopped coming, which destroyed the cash flow to the base of the system.
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How did you attract customers?
The biggest scammer in history was a member of the most exclusive clubs in the United States, such as the Palm Beach, Where he contacted great personalities such as Steven Spielberg, To those who managed to influence them to agree to invest in his signature Fairfield Greenwich Group.
Its victims were captured with the striking strategy split strike conversion, Which promised investors to generate profits in both markets rise as in the low buying shares of large companies and options to buy and sell them.
The company facade Bernard Madoff Investment Securities LLC, Served the millionaire to do the tasks of stockbroker without generating suspicion, in addition to the credibility that gave him be former chairman of the board of directors of the Nasdaq index, The largest automated electronic stock exchange in the United States.
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Bernard Madoff ordered the statements of his investors by traditional mail, and never by e-mail, so as not to leave traces of his frauds on the net.
How did the money work?
When Madoff Investment Securities received new funds, rather than using them in the strategy offered, most of it was intended for the payment of the initial investors of the pyramid, Leaving a minimum amount to really invest.
The scammer worked with banks through large asset managers, so Madoff made banks like the Santander they invested in his signature.
With the assets handled by the American, and a list of top-tier clients, the victim manager company looked like 1 profitability more than enough.
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When Bernard Madoff’s scam was discovered in December 2008, the former president Obama blame the market regulatory agencies, pointing out that they have failed in their duties.
Some of the investors most affected by the fraud were the French Agricultural credit, With 10 million euros and the Italian Unicredit, With 75 million, as well as the Steven Spielberg’s NGO and a foundation of the Nobel Peace Prize Elijah Wiesel.
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