Ponzi Scheme

Aside from movies like Oliver Stone’s Wall Street and Martin Scorsese’s more recent Wolf of Wall Street, one of the few experiences the average layperson will have had with investment fraud is Bernie Madoff, infamous for a Ponzi scheme that defrauded nearly 5,000 victims of over $64 billion in 2008. Nearly a decade later, Madoff’s sons’ estates have agreed to repay $23 million to victims on the basis that the profits the sons earned were obtained through their father’s illicit dealings. However, victims and their lawyers say that justice is too slow in coming as the feds still struggle to untangle and repay funds. Both Mark and Andrew Madoff have died in the intervening years, from suicide and cancer respectively, so this battle largely came down to lawyers for their individual estates working to come to find common ground with lawyers for the trustee of the original principal, Irving Picard. This new agreement does not supersede the Justice Department’s Madoff [...]

For many people, the phrase “securities fraud” is synonymous with Bernie Madoff, the man who ran a multi-billion dollar Ponzi scheme that resulted in thousands of people losing their investment funds. In truth, securities fraud encompasses much more than the stereotypical boiler room: it is any act by a broker, advisor or investment firm that leads an investor to make purchases or sales based on false or incomplete information. As an investor, you have options when your stock broker “steals” your money, either through willful and malicious actions, or through negligence. You can pursue a claim for damages in the civil court system, through settlement negotiations, or through FINRA arbitration proceedings. Regardless of whether or not the government levels federal criminal charges against the individual or the firm, you can still make a claim to recover your losses. The Investor Bill of Rights One or the best ways, of course, to avoid being a victim of securities fraud is to [...]