Wall Street Scandal: Shocking Wall Street fraud affects US and European Firms - by Cathy McCabe
Madoff, a quiet force on Wall Street for decades, was arrested and charged Thursday with allegedly running a $50 billion "Ponzi scheme" in what may rank among the biggest fraud cases ever, according to the Associated Press.
On Wall Street, his name is legendary. With money he had made as a lifeguard on the urban beaches of Long Island, he built a trading powerhouse that had prospered for more than four decades. At the age of 70, he had become an influential spokesman for the traders who are the hidden gears of the marketplace. But on Thursday morning, this consummate trader, Bernard Madoff, was arrested at his New York home by U.S. government agents who accused him of running a multibillion-dollar fraud scheme, perhaps the largest in Wall Street's history. Regulators have not yet been able to verify the scale of the fraud. But the criminal complaint filed against him Thursday in U.S. District Court reports that Madoff himself estimated the losses at $50 billion. European investors in Madoff's firm include the British fund manager Nicola Horlick's Bramdean Alternatives and UniCredit's Pioneer Alternative Investments, according to Bloomberg News and Reuters, who cited unnamed people. Benedict Hentsch, a Swiss private bank, said it had 56 million Swiss francs, or $47 million, of exposure to Madoff's investment advisory business. At the request of the SEC, a District Court judge appointed a receiver to secure the Madoff firm's overseas accounts and warned the firm not to move any assets until he had ruled on whether to freeze the assets.
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