Angry Grandpa actually died
Financial fraudster Bernard Madoff dies
For a long time, the US investor Bernard L. Madoff was considered a dazzling figure in the financial world. His funds grew steadily in value. The who's who of the scene was invested in him. Actors like financial actors. The shock was correspondingly great when it turned out that Madoff had not made any real investments, but had built up a mega pyramid scheme. With such a system, new investors are always lured. Existing customers receive dividends, bonuses and returns with their money. As long as there are enough new customers, the system works. It only becomes critical when new customers are missing - or, as in the case of Madoff, existing customers want to withdraw money. Then the system collapses.
Before Madoff's fraudulent activity was exposed, he was a well-respected securities trader and chairman of the Nasdaq technology exchange. Therefore, people also had confidence in him. He had a reputation in the industry - also in the US Securities and Exchange Commission. Warnings from a whistleblower were reported there as early as 1999 - and ignored.
But in the wake of the financial crisis, when money was running out in the financial system and financial institutions no longer trusted each other, Madoff's hoax was exposed. In late 2008, Madoff was arrested for fraud and sentenced on June 29, 2009 to 150 years in prison. He had pleaded guilty to eleven counts, including fraud and money laundering. In the process, Madoff also admitted that he had never invested the sums entrusted to him.
At the time of the trial of Madoff, the total extent of the damage was estimated at at least 65 billion dollars (around 51 billion euros) and the number of victims at 4,800. Around three million people around the world were directly or indirectly affected. Around 300 law firms and 45,000 lawyers are said to have dealt with the case at the time.
Many Austrians affected
In Austria, too, there were very many Madoff victims who made claims. Only from the USA, Germany, France and Switzerland came more cases. In this country, the Herald funds were sold, among others, by the former Viennese Bank Medici (founded in 1984) and Bank Austria (once co-owner of Medici). Fund money ended up with Madoff. According to the OeNB, Austrian investors lost a total of around 350 million euros. The cause resulted in many civil lawsuits.
Medici founder Sonja Kohn was an investment banker and was considered a brilliant networker, whom Madoff is said to have met as early as the 1980s, according to the "Financial Times". The private bank also did its main business with funds - allegedly more than three billion dollars were invested in Madoff. Bank Austria and Bank Medici finally paid $ 500 million into the Madoff mass pot.
The married couple Ruth and Bernard Madoff acted as donors to numerous charitable and cultural institutions and were members of the boards of many theaters, foundations and colleges. Because of this philanthropic image, several charitable foundations decided to entrust their money to Madoff, which ultimately resulted in high financial damage to them. Madoff passed away on Wednesday at the age of 82.
Madoff was born in Brooklyn, New York, in 1938, the second of three children to Sylvia Muntner and Zookan "Ralph" Madoff. His grandparents were Eastern European Jews who, according to Wikipedia, immigrated to the United States in the early 20th century. Madoff grew up in a modest family (his father's sports business had to file for bankruptcy) in Laurelton, a middle-class and at the time largely Jewish immigrant area of Queens, where he attended public school and, from 1952, Far Rockaway High School. Madoff married his wife Ruth in 1959. They had two sons: Mark (1964-2010, suicide) and Andrew (1966-2014, cancer).
With $ 5,000 in savings from vacation jobs as a lifeguard (at the Silver Point Beach Club in Atlantic Beach, Long Island) and garden irrigation installer, Madoff founded an investment firm called Investment Securities in 1960, initially specializing in penny stocks. Ten years later she had a large number of customers, most of whom he had won in high society country clubs such as the Palm Beach Country Club. His company initially lived on the so-called spread, the difference between the offer and demand price of a security. In addition, he offered computer trading in securities at an early stage and was thus often able to offer cheaper prices, which in turn offered advantages for funds.
The not entirely kosher business conduct might have run in the family. In August 1963, the approval of Sylvia Madoff, the mother of Bernard Madoff, who worked as a "broker dealer" with her company Gibraltar Securities, was questioned by the US regulator. In January 1964, the SEC decided not to take any further action in connection with its unclear financial circumstances, but in return Sylvia Madoff had to give up her activity. It is unclear whether her husband Ralph ran the business, although she was registered for it. To what extent this was related to the couple's tax debts is also unclear.
In an interview with the Washington Post in February 2020, Madoff complained of being terminally ill and applied for early release in the corona pandemic, which was not granted. His attorney stated at the time that Madoff had fatal kidney disease and was likely to have less than 18 months to live. (Bettina Pfluger, April 14th, 2021)
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