Thursday, March 12, 2009

Madoff conviction might only be the beginning

If the Western economic system is ever to regain respect from the everyday people it was supposed to benefit, today's conviction of Wall Street financier Bernard Madoff is only the first in a long line of similar cases -- most still to be filed. The former Nasdaq chairman pleaded guilty on Thursday to running a $65 billion investment fraud thought to be the largest in Wall Street history, according to the Reuters international news service. The 70-year-old is expected to be sentenced to prison for the rest of his life. At a federal court hearing in Manhattan, Madoff admitted to setting up a worldwide Ponzi scheme from the beginning, but said he expected to be able to get himself and his clients out of it quickly, Reuters said. "I am painfully aware that I have deeply hurt many, many people," he told U.S. Judge Denny Chin in his first public acknowledgment of the fraud. "When I began my Ponzi scheme I believed it would end shortly and I would be able to extricate myself and my clients from the scheme." Madoff, who read from a prepared statement, said he was unable to shut down the scheme, which used money from new investors to pay earlier investors for 20 years. "As the years went by, I realized that my arrest and this day would inevitably come," Madoff said. The scandal has increased scrutiny of Wall Street and government regulators who were supposed to be monitoring investments and preventing wrongdoing. The scam was first brought to the attention of the U.S. Securities and Exchange Commission in 1999, Reuters said. Investors -- some of whom attended today's court hearing, included hedge funds, banks, Jewish charities, the wealthy, and small individual investors in North and South America and Europe. Madoff could get a sentence as long as 150 years for the 11 charges against him, which include securities fraud, money laundering and perjury, Reuters said. Sentencing is scheduled for June 16.

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