Madoff: No investments for clients in 13 years

By Stephen Foley
Saturday 21 February 2009 01:00

Bernard Madoff, the Wall Street grandee whose confession of a $50bn (£35bn) pyramid scheme prompted a new crackdown on fraud in the US, had not made a single investment on behalf of his clients in at least 13 years, it was revealed yesterday.

Hundreds of his victims crammed into a bankruptcy courthouse in Manhattan yesterday to hear details of the investigation into Mr Madoff, but were given no assurances they would see any of their money again.

Irving Picard, the trustee overseeing the liquidation of Mr Madoff’s brokerage, said that they were working at “a crime scene”, poring over thousands of documents housed at the company’s headquarters in Manhattan, at an office basement and at a warehouse in the borough of Queens.

“We are getting a feel for how this operation worked,” Mr Picard said. Money from new investors went straight to pay old clients, with not even a rudimentary investment business, despite Mr Madoff’s elaborate claims to have found a highly successful shares and derivatives trading strategy. “We have no evidence to indicate securities were purchased for customer accounts.”

At the meeting, numerous victims expressed their fury that Wall Street regulators, including the Securities and Exchange Commission, had rep-eatedly investigated claims against Mr Madoff but failed to uncover hist-ory’s largest-ever fraud. About 2,350 customer claims had been filed already.

Mr Madoff was charged with fraud after confessing to his sons in December. The list of his victims includes celebrities and charities, as well as investors across the world.

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