Biggest Ponzi scheme fraud exposed

The recent exposure to $50 billion Ponzi scheme fraud by the former NASDAQ chairman, Bernard Madoff caused a stir in financial and investment world. Most of the Spanish and Swiss banks lost over a billion US dollars each.
The UK asset manager, Bramdean Alternatives Ltd headed by well-known fund manager Nicola Horlick, said almost 10 percent of its holdings were exposed to Madoff. Bramdean said it had two holdings that maintain trading accounts with Bernard L. Madoff Investment Securities that represented 9.5 percent of its net asset value at the end of October. A UK real estate investor, Vincent Tchenguiz is also reported to have his asset invested in Madoff scheme.

Some people familiar with the case said that Bernard L. Madoff Investment Securities, which he founded in 1960 was never inspected by U.S. regulators after he subjected it to oversight two years ago. The Securities and Exchange Commission hasn’t examined Madoff’s books since he registered the unit with the agency in September 2006, two people said, declining to be identified because the reviews aren’t public. The SEC tries to inspect advisers at least every five years and to scrutinize newly registered firms in their first year, former agency officials and securities lawyers said.

Madoff was charged on 11 December 2008 by federal prosecutors with a multibillion- dollar securities fraud. He is currently free on a $10m bond.