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This Day In Market History: Bernie Madoff Arrested

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This Day In Market History: Bernie Madoff Arrested

Each day, Benzinga will take a look back at a notable market-related moment that happened on this date.

What Happened?

On this day in 2008, Bernard Lawrence “Bernie” Madoff was arrested on charges of fraud after orchestrating the largest Ponzi scheme in history.

Where Was The Market?

The S&P 500 closed the day at 873.59, and the Dow closed at 8,565.09.

What Else Was Going On In The World?

U.S. Congress was debating over a $14 billion rescue package for auto makers General Motors Company (NYSE: GM) and Fiat Chrysler Automobiles NV (NYSE: FCAU), and the top song on the pop charts was “Womanizer” by Britney Spears.

Raising The Ponzi Bar

Madoff’s operations was nothing particularly creative or special, but nobody had operated a Ponzi scheme on the same scale as Madoff ever before. In a nutshell, Madoff promised clients exceptional returns, then took their money and used it to pay off other clients. Madoff produced fake documents and account statements and was able to keep the fraud going for years by simply taking on more clients and more principle.

However, the tide finally turned in 2008 when the financial crisis struck and Madoff was no longer able to support his house of cards.

Madoff was arrested Dec. 11, 2008 on multiple felony charges of securities fraud, wire fraud, mail fraud perjury and money laundering. Over a period of 17 years, he lured more than 4,800 clients and lost tens of billions of dollars.

“I have left a legacy of shame, as some of my victims have pointed out, to my family and my grandchildren,” Madoff said following his arrest. “This is something I will live in for the rest of my life.”

Madoff was ultimately sentenced to 150 years in prison for his crimes.

Related Links:

Bobby Bonilla Day: How Bernie Madoff Helped Screw Over The New York Mets

'The Wizard Of Lies': Is HBO's Bernie Madoff Biopic Worth The Time Investment?

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