The World’s Biggest Ponzi Scheme?

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Two days ago the FBI indict­ed Bernie Mad­off, prin­ci­pal of Bernard L. Mad­off Invest­ment Secu­ri­ties LLC, on secu­ri­ties fraud. Though the case has yet to run, in the indict­ment the FBI report­ed that Mad­off con­fessed that his was “basi­cal­ly a giant Ponzi Scheme”  that may have lost some extreme­ly high net worth indi­vid­u­als over US$50 bil­lion.

Mad­of­f’s firm was famous for return­ing con­stant pos­i­tive results, even on a month by month basis, for decades. As Hen­ry Blod­get on Yahoo’s Tech Tick­er reports below, many Wall Street pro­fes­sion­als were incred­u­lous of these results, but invest­ed in his firm anyway–because they thought his returns must be com­ing from him exploit­ing his “mar­ket mak­er” role on the Nas­daq to do insid­er trad­ing.