Madoff’s investors celebrate the holiday season – asking where their money went?
Daylife/AP Photo by Diane Bondareff

The former chairman of the Nasdaq stock market has been arrested and charged with securities fraud, in what may be one of the biggest fraud cases yet.

Bernard Madoff ran a hedge fund which ran up $50bn (£33.5bn) of fraudulent losses and which he called “one big lie”, prosecutors allege. Mr Madoff is alleged to have used money from new investors to pay off existing investors in the fund.

The collapse of Madoff is likely to accelerate the disappearance of hedge funds

According to the US Attorney’s criminal complaint filed in court, Mr Madoff told at least three employees on Wednesday that the hedge fund business – which served up to 25 clients and had $17.1bn of money under management – was a fraud and had been insolvent for years, losing at least $50bn.

He said he was “finished”, that he had “absolutely nothing” and that “it’s all just one big lie”, and that it was “basically, a giant Ponzi scheme”, the complaint said.

He told them that he planned to surrender to the authorities but not before he used his last $200m-$300m to pay “selected employees, family and friends“.

Dan Horwitz, Mr Madoff’s lawyer, said: “Bernard Madoff is a longstanding leader in the financial services industry. We will fight to get through this unfortunate set of events.”

“Unfortunate set of events?” You represent a fracking crook.

This schmuck defrauded investors of enough money to bail the automobile industry a couple of times over.