Bernard Madoff Will Have to Face Investors on ThursdayMar 10, 2009 | Parker Waichman LLP
Some of Bernard Madoff's investors want to be heard when he pleads guilty to fraud charges on Thursday. According to USA Today, federal prosecutors have heard from at least 25 investors who want a chance to tell Madoff how his alleged Ponzi scheme has forever altered their lives.
Madoff - once a chairman of the Nasdaq stock exchange - was arrested on a single count of securities fraud on December 11. Once a respected figure on Wall Street, Madoff was the founder and primary owner of Bernard L. Madoff Investment Securities LLC. The firm was primarily known for its business in market-making, or serving as the middleman between buyers and sellers of shares. However, Madoff also oversaw an investment-advisory business that managed money for high-net-worth individuals, hedge funds and other institutions.
According to the FBI complaint against Madoff, that business was largely a Ponzi scheme. The FBI said Madoff “deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately millions of dollars."
Madoff is expected to plead guilty to fraud charges during a hearing in Federal Court on Thursday. According to The Wall Street Journal, those charges are expected to include securities fraud, wire fraud, mail fraud and money laundering.
Since news of a Madoff guilty plea first went public, at least 25 investor have emailed U.S. prosecutors asking to speak at Thursday's hearing in federal court in Manhattan, USA Today said. Prosecutors described the e-mails in a letter to Judge Denny Chin, who sent notification to investors last week saying they could speak Thursday. According to the USA Today report, prosecutors have not said whether each e-mail involved a single investor or multiple Madoff victims.
According to a report on CBSnews.com, investors are hoping that Thursday's hearing will answer some of their most pressing questions. Most importantly, they want prosecutors to spell out how Madoff's scheme worked, how much money they will get back and who else was involved.
"If those questions aren't answered, then the government should proceed in every way possible to put him in prison for as long as possible, and go after absolutely everyone that they can go after - the sons, the brother, the wife, Ruth, anyone complicit in this," a lawyer representing 100 Madoff victims told CBS News.
Some investors are particularly concerned about Madoff's wife, Ruth, who is trying to retain millions of dollars in assets for herself. As we reported last week, Madoff’s lawyers claimed the couple’s $7 million Manhattan penthouse, $45 million in municipal bonds and another $17 million held in separate account belonged to Ruth Madoff. Advocates for Madoff’s investors have decried this move, pointing out that Ruth Madoff was her husband’s bookkeeper for a time, and thus may be both civilly and criminally culpable for his fraud.
According to USA Today, investors face a 10 a.m. Wednesday deadline to file speaking requests with prosecutors.