Madoff Scandal: This Could Really Hurt
Updated from Dec. 11
The Thursday arrest of Wall Street investor Bernie Madoff would be great fodder for playwrights Arthur Miller or David Mamet -- the story of a great American schemer driven to desperation to maintain his relevance as the world passes him by -- except it could do real damage when the markets open Friday.
The charges against Madoff are damning. Indeed, the Securities and Exchange Commission characterized the alleged fraud as "stunning" and "epic" in proportion. The former Nasdaq stock market vice chairman allegedly ran an elaborate Ponzi scheme with clients of his firm, Bernard L. Madoff Investment Securities LLC, and did so for years at the loss of some $50 billion.
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The news could deal another blow to markets already reeling from a series of blowups that began with the unraveling of two Bear Stearns hedge funds last year. "When the tide goes out on Wall Street, all kinds of flotsam and jetsam are revealed in the mud flats," wrote John Coffee, professor at Columbia University School of Law, in an email to TheStreet.com. ...
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