Warnings & Red Flags

Madoff Tops Charts; Skeptics Ask How (PDF)
Reporter Michael Ocrant's May 2001 article in which he questioned Madoff's consistent returns and why others weren't unable to duplicate them. It was published in MARHedge, a monthly publication covering hedge funds.

What We Wrote About Madoff
Six days after Ocrant's article, Barron's, a prominent Wall Street weekly, picked up the thread and raised similar questions. This is a link to a Barron's story about their 2001 story -- including some excerpts from it. The full 2001 article is here on The Wall Street Journal's Madoff page; scroll and click on "Don't Ask, Don't Tell."

The World's Largest Hedge Fund Is a Fraud (PDF)
This is Harry Markopolos' famous 2005 memo to the SEC, listing 29 "red flags" on Madoff. Markopolos had first contacted the SEC in May 2000, submitting at that time an eight-page memo -- more of his documents can be found on The Wall Street Journal's Madoff page.

The Man Who Knew -- Video
Five times Markopolos tried to warn the SEC. Here he tells 60 Minutes how he caught on to the scam, and the deep deficiencies he sees in the commission: "Even when pointed to fraud, they're incapable of finding fraud." (March 4, 2009)

Chasing Madoff -- Audio
Boston's public radio station, WBUR, retraces Markopolos' eight-year pursuit of the man he considered a domestic terrorist. "Harry kept a loaded shotgun in his home office. And assembled a team modeled on an anti-terrorist cell." (April 2009)

SEC Statement Regarding the Madoff Investigation
Here SEC Chairman Christopher Cox admonishes his agency for ignoring the allegations against Madoff, ordering an internal review and writing, "I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them." (Dec. 16, 2008)

SEC Slammed During Madoff Hearing
The Newshour reports on the February 2009 congressional hearings on Madoff, which included testimony from Harry Markopolos. Five SEC officials were taken to task for failing to act.

The Minus Touch
"The laissez-faire markets of the Bush era, the greed-is-good eagerness with which everyone went sprinting into Madoff's trap, and the fact that Madoff's crime was exposed by the downturn mean that his name is liable to emerge as a convenient symbol of the ridiculous excesses that resulted in a worldwide market meltdown in the last quarter of 2008," writes Scott Turow in Portfolio. (March 2009)

Unraveling the Fraud

Q&A on the Madoff Case
The Wall Street Journal compiled this page of frequently asked questions about Madoff's deception, including, "Where did all the money go?"

Madoff Scheme Kept Rippling Outward, Across Borders
Diana Henriques' piece in The New York Times on how Madoff's scam expanded from a small circle of investors to take in Jewish philanthropies via Ezra Merkin's feeder funds and then went global, largely due to hedge fund Fairfield Greenwich Group. (Dec. 19, 2008)

How Bernie Did It
Fortune magazine investigates Madoff's scheme, including his mother's run-in with the SEC and the role of Frank DiPascali, Madoff's key lieutenant on the 17th floor. (April 24, 2009)

Before the Fall
Traders Magazine goes in depth on Madoff's history and market-making business, where he was an early adopter of electronic trading and a supporter of the fledging Nasdaq stock exchange. But Madoff also pushed for regulatory changes that would have seemingly hurt his business, leading some to wonder whether his Ponzi scheme was subsidizing his legitimate activities. (March 2009)

Who Is Bernard Madoff?

The Talented Mr. Madoff
The New York Times asks which was the real Bernie Madoff: the "affable, charismatic man who moved comfortably among power brokers on Wall Street and in Washington," or the recluse who was "quiet, controlled and closely attuned to his image, down to the most minute details." To find out, the Times interviews childhood friends, longtime neighbors and psychologists. (Jan. 24, 2009)

Mom and Dad and Ruth and Bernie
A lifelong friend of the Madoffs recounts to New York Magazine his family's close ties, including their role, 40 years ago, as "angel investors" in his fund. "Had my mother lived, she would have killed him." (Feb. 22, 2009)

The Monster Mensch
New York magazine profiles both Madoff, a scrapper who still had "a whiff of Queens about him," and his erudite, Upper East Side feeder, Ezra Merkin. From different worlds, the two men shared a drive to succeed: Madoff strove to break into the insular world of Wall Street, while Merkin excelled in order to win the approval of his distant father. (Feb. 22, 2009)

A Schlub and A Narcissist
Forbes columnist Susan Lee recalls meeting Bernie Madoff, who "appeared to be so intellectually inert that his success was a great puzzle." She writes, "I assumed, like many people did, that his money came from front-running clients at his brokerage." Lee goes on to psychoanalyze Madoff, diagnosing him as a narcissist and comparing him to Charles Dickens' swindler Mr. Merdle. (March 27, 2009)

Putting Bernie Madoff On The Couch
Time magazine ponders the psychology of Bernie Madoff: Is he a narcissist or some form of psychopath? And why would he start a Ponzi scheme, "a plan that is uniquely without an exit strategy"? One partial explanation: "The pyramid structure of a Ponzi scam means that there can be only one person at the pinnacle -- an appealing idea for a narcissist." (Dec. 31, 2008)

The Feeder Funds

Dumb Money and Dull Diligence
"What marks Mr. Madoff's case out, however, is the calibre of investor he suckered," says The Economist. "Never have so many big financial institutions -- the oxymoronic 'smart money' -- been so bilked by an individual." (Dec. 18, 2008)

Madoff's Man
Broward/Palm Beach News reporter Bob Norman reports that Michael Bienes and Frank Avellino -- Madoff's earliest feeders back in the 1960s -- never stopped recruiting investors for him, even after the SEC shut them down in 1992. According to Norman, the two simply steered money through another accountant, Michael Sullivan, a charge Bienes vehemently denies in his interview with FRONTLINE. (Jan. 20, 2009)

Greenwich Mean Time
Vanity Fair's profile of the rise and fall of Fairfield Greenwich Group head Walter Noel, whose family made a mark in Greenwich, Conn. and whose sons-in-law's marketing took Madoff's investment business global. Now that the scheme has come apart, "the anger towards the Noels is widespread and runs deep." (April 2009)

The Charming Mr. Piedrahita Finds Himself Caught in the Madoff Storm
The Wall Street Journal interviews Andrés Piedrahita, the most charismatic of Walter Noel's son-in-law salesmen whose "real job, he once told a friend, was 'to live better than any of my clients.'" In that respect, he was a smashing success, even as his clients lost their fortunes to Madoff. (March 31, 2009)

Madoff's Hollywood Connection
Madoff's scheme also ensnared show business luminaries like Steven Spielberg and Jeffrey Katzenberg, but in these cases, the feeders were not hedge funds, but Hollywood business managers like Stanley Chais. Portfolio looks at the financial responsibility entrusted to Hollywood business managers, and how that arrangement made easy marks of Hollywood royalty. (March 2009)

Victims

Investors' Stories
Read the stories of Madoff's victims who appeared in FRONTLINE's report.

Madoff's World
Vanity Fair contributing editor Mark Seal profiles Madoff via his investors, including supermodel Carmen Dell'Orefice, the late real estate tycoon Norman Levy, and philanthropist Carl Shapiro. Seal -- who himself had tried unsuccessfully to invest with Madoff -- writes: " I felt like the Angel of Death, knocking on the doors of the once privileged, chosen people who had gained admission into Bernie Madoff's amazing investment vehicle, only to be fleeced by him." (April 2009)

Dispatch: Reversal of Fortune
Laurence Leamer, author of a new book on Palm Beach's mega-rich, profiles the community's Boston-based Jews -- in particular Carl Shapiro and Robert Jaffe -- who "unwittingly helped make Madoff possible." The sums lost are gargantuan. Leamer writes, "A friend from the building across the street told me he had suffered just a 'nicking' -- but in Palm Beach, a 'nicking' could be $5 million to $10 million." (Boston Magazine, February 2009)

Madoff Had Accomplices: His Victims
New York Times business columnist Joe Nocera recounts the scene at Madoff's guilty plea, but also takes the victims to task for abdicating responsibility for their investments. "When you look at the list of Madoff victims, it contains a lot of high-profile names -- but almost no serious institutional investors or endowments. They insist on knowing the kind of information Mr. Madoff refused to supply." The Times also published a searchable version of the Madoff victim list. (March 13, 2009)

Bernie's Universe
This Wall Street Journal interactive feature makes Maddoff the hub of a spoked wheel of individuals, institutions and funds that invested with him. The Journal has also mapped Madoff's victims across the country.

Madoff Scandal Rips Apart Close World of Jewish Philanthropy
The Jewish Daily Forward examines the impact Madoff's scheme has had on the Jewish community and major charities that had invested with him. "The loss of money and trust together has dealt Jewish philanthropy -- a pillar of American philanthropy -- a blow from which it will not recover anytime soon." (Dec. 18, 2008)

Lawsuits, Documents & Legal Information

United States v. Bernard L. Madoff
The Department of Justice provides court documents, information for investors and updates on the case. In the transcript of his plea hearing (PDF), Madoff sketches an outline of his scheme, which he claims began in the early 1990s. (p. 23) "I felt compelled to satisfy my clients' expectations, at any cost," he says. You can also read the prosecution's version of events (p. 31): "At the end, Madoff told his clients he was holding nearly $65 billion in securities on behalf of those clients. In fact, he had only a small fraction of that amount."

Massachusetts Charges Fairfield Greenwich with Fraud
"Obviously, first of all, this conversation never took place," Madoff says in a December 2005 phone conversation (PDF), submitted as evidence, in which he coaches Fairfield Greenwich reps on talking to SEC investigators. Part 1 (PDF) of the state's complaint alleges, "Fairfield's complete disregard of its fiduciary duties to its investors and its flagrant and recurring misrepresentations to its investors rises to the level of fraud." Part 2 lays out the state's case and argues that the Fairfield's principals pocketed far more from the scheme than they claimed to. Fairfield Greenwich has responded that Galvin's case is "so filled with errors and factual distortions as to completely misstate the conduct" and says it engaged in "substantial" due diligence in its dealings with Madoff.

Madoff Middleman Ezra Merkin Charged With Fraud
New York Attorney General Andrew Cuomo's accuses J. Ezra Merkin of passing himself off as an "investment guru" while funneling $2.4 billion to Madoff in return for hundreds of millions of dollars in fees. Cuomo also alleges Merkin ignored "glaring red flags" -- "at least two of Merkin's most trusted colleagues repeatedly told Merkin that Madoff's returns were too good to be true." You can read some of the state's evidence against Merkin, including portions of his deposition (PDF). Merkin's lawyers issued a statement describing Cuomo's lawsuit as "hasty and ill-conceived" and arguing "Unfortunately, Mr. Merkin's due diligence, just like the detailed investigations performed by countless others, including regulators, was thwarted by the intricate, fraudulent scheme perpetrated by Madoff."

Madoff Court-Appointed Trustee Site
Established at Madoff Securities' own former Web address, this is the official Web site of Irving Picard, the court-appointed trustee who has begun filing lawsuits to "claw back" assets for Madoff's victims. In a suit (PDF) against West Coast feeder Stanley Chais for example, Picard claims Chais and his fellow defendants "knew or should have known that they were reaping the benefits of manipulated purported returns," benefits from which they withdrew more than $1 billion over the years.

Ponzis & Other Financial Scams

Brief History of Ponzi Schemes
According to Time magazine, the scam predates its namesake: "The reigning king of the 'rob Peter to pay Paul' scam was a New York grifter named William Miller, who bilked investors out of $1 million -- nearly $25 million in today's dollars -- in 1899." But the "golden age" of the Ponzi scheme wouldn't come until nearly a century later, during the boom of the 1980s and '90s. (Dec. 15, 2008)

Slate's Guide to Financial Scams
The online magazine explains how a Ponzi differs from a pyramid scheme, a jitney game and other scams. (Dec 16. 2008)

Why We Keep Falling for Financial Scams
A psychology professor -- himself a victim of Madoff -- dissects human gullibility and how Madoff exploited it so successfully. Madoff duped investors, he argues, because of the same "irrational exuberance" that drives other financial bubbles. (The Wall Street Journal, Jan. 3, 2009)

Madoff and Ponzi: Reflections of Their Times
Charles Ponzi biographer Mitchell Zuckoff compares two very different men who nonetheless shared "a keen sense of investor psychology and tribal loyalty, a penchant for mystery, and a belief that nothing beats word-of-mouth advertising from satisfied investors." (The Boston Globe, Dec. 21, 2008)

The United States of Ponzi
"Madoff is the mirror of the American economy and of its over-leveraged agents," writes economist Nouriel Roubini. Looking back at the causes of the economic crisis, he calls borrowers, banks and the U.S. government "Ponzi agents" for borrowing more than they could repay. (Forbes, March 19, 2009)

The Psychology of Investing Scams
U.S. News & World Report identifies five techniques used to draw investors into scams and offers tips on how to avoid them. (March 5, 2009)

Madoff News/Blogs

The Madoff Affiar: Behind the Scenes
Here’s a MainStreet.com interview with Martin Smith about his experience making this film. (May 19, 2009)

The Wall Street Journal: The Madoff Fraud Case
Much of the content is for subscribers only, but this index page has multimedia features on Madoff's victims, a multi-part video report, court documents and Harry Markopolos' warnings to the SEC.

Times Topics: Bernard L. Madoff
This New York Times index page on Madoff summarizes the case, highlights recent developments and links to Times stories and multimedia features.

The Daily Beast: The Madoff Scandal
Former New Yorker editor Tina Brown's online tabloid collects its own Madoff content and links from across the Web.

Bloomberg on Madoff
No frills, just the latest reporting on the Madoff scandal from the financial news service.

The Business Insider: Bernie Madoff
The business news Web site started by former analyst Henry Blodgett collects its Madoff coverage here, including posts from its irreverent financial industry blog, Clusterstock.

Madoff News on Toomre Capital Markets LLC
This blog by a financial consulting company has taken a particular interest in the Madoff case. A good source for ongoing news on the investigation.