Bernie is such a good Democrat. He contributed to endless Democrat candidates including Barrack Hussein Obama.
Throw the whole family in jail and put Bernie in the electric chair. Lautenberg aka “the Mummy” was a big investor.
You know what the dirty stinking secret is - Madoff first business or main business was market making in stocks. The stories are not telling you that most investors thought Bernie was essentially front running his order flow to get such good returns (i.e. cheating).
This means his traders could see big block of say IBM being bought and Bernie’s traders would trade ahead or buy before those trades were executed. This could boost returns. If you had some pretty sophisticated softwrae this is one way Bernie could have cheated to get an edge - if he had been smart enough.
In other words his investors thought Bernie was engaging in illegal actions to get an edge on the market. Well he was but they were not the illegal acts his investors expected! It was their little secret unfortunately it was not the secret they expected.
You are right about front running, which is illegal. The stories I linked to in first post don't say this, but the previous ones by NY Post do mention this (though they "tactfully" don't call it front running).
In the thread I Knew Bernie Madoff Was Cheating--That's Why I Invested with Him , my post #8 cites the link to NYP article MADOFF'S STRATEGY WAS JUST TOO GOOD TO BE TRUE.
From that article: Madoff used what's called a "split-strike conversion" investment strategy, in which Madoff's firm bought a basket of stocks found in the Standard & Poor's 500 index.
The strategy tied nicely with Madoff's main business of making markets in S&P 500 stocks and benefiting from the "bid" and "ask" - essentially the highest price a buyer will pay for a stock and the lowest price at which a seller is willing to part with a stock.
In simple terms, Madoff's split-strike trade consisted of buying S&P 500 stocks and selling a "call" option above the price of the market and buying a "put" option at the price of the S&P 500 index. The trade, also known as a "collar," is meant to limit any swings in price.
For Madoff, the strategy essentially would have captured any money made on the bid-ask spread, said Jon Najarian options expert and co-founder of OptionMonster.
Najarian estimates that at best Madoff would have generated 5 percent or 6 percent annual returns. Factoring in the costs associated with the strategy, Madoff likely broke even at best.
That's a polite way to describe front running by a market maker or a specialist. They didn't pay mucho money for a seat on the exchange, did they? When exchanges went to a penny spread, MMs profitability took a big hit.
In the end, Bernie had to fold because he couldn't survive his investors' calls asking for redemptions from fund, i.e. the "run on Madoff bank".
That’s the weird thing about all this. He COULD have gotten those returns by cheating, so one has to wonder why he didn’t. Maybe he imagined the regulators would catch him — except that he WAS a regulaor, and should have known they wouldn’t bother investigating him seriously, no matter how many red flags his trading sent up.