Ma-doff! Ma-doff! Ma-doff!

UPDATE: BIG TIME FRAUD, Warnings ignored as far back as 1999.
Some of America’s wealthiest movers and shakers are facing ruin after the arrest of a Wall Street big hitter accused of the largest investor swindle perpetrated by one man. Shock and panic spread through the country clubs of Palm Beach and Long Island after Bernard Madoff, a trading power broker for more than four decades, allegedly confessed to a fraud that will cost his wealthy investors at least $50 billion – perhaps the largest swindle in Wall Street history. .. Many of his investors came from the enormously wealthy enclaves of Palm Beach, Florida and Long Island, New York, where people had invested billions in Mr Madoff’s firm for decades. He was a fixture on the Palm Beach social scene, and was a member of some of its most exclusive clubs, including the Palm Beach Country Club and Boca Rio Golf Club, where he drummed up much of his business.

The FBI claims that three senior employees of Mr Madoff’s investment firm turned up at his apartment on Wednesday to ask questions about the company’s solvency. Two of them are believed to be his sons, Andrew and Mark, who have worked for their father for two decades.

Someone in the hedge fund business told me today that in New York this is being described as a "financial holocaust."

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If there's a business scandal that can top those of Worldcom, Enron or the more recent Fannie Mae house-of-cards, then hold on to your hat and pocketbook: an even bigger train wreck is coming down the tracks. Bernard Madoff, former chairman of NASDAQ and head of a so-called billion dollar hedge fund, was turned in by his sons then arrested by authorities Thursday after revealing his fund was nothing more than a great big Ponzi scheme with no real assets at all!

It's all a big lie, he confided to his sons earlier this week.



A smart money man told me this morning, "It's bigger than anything we've seen. Long Island will be wiped out. Destroyed. You can't image the scope of this. People who thought they were invested and are left holding the bag in this fund will lose everything, 100% on their money."

This is the kind of thing that will give money managers a black eye for years. And it will force investors be much more thorough in their due diligence before giving their money to managers to invest. It's a sad day for Wall Street and Main Street.