Did Bernie Madoff run a Ponzi scheme or was there actual trading?
The dispute highlights how almost a decade on, basic elements of one of the biggest scandals in history are still hotly contested
New York — Scores of Bernard Madoff’s former customers are pushing for access to a massive database of trading records and other documents seized from the con man’s now-defunct securities firm to advance a fringe theory about the epic fraud: it was not a Ponzi scheme. Bizarre though it sounds, there is a reason why they are advancing the claim: if it wasn’t a Ponzi scheme, they needn’t surrender more than $100m in what the trustee of Madoff’s firm calls false trading profits. The customers say they can prove Madoff used cash from his investment advisory customers to buy billions of dollars in treasuries and held Fortune 100 stocks that appeared on their statements. That, they argue, would defeat the trustee’s claim that it was all a Ponzi scheme in which no real trading took place — a theory the trustee calls pure fiction. "The standard for a Ponzi scheme is that there is no legitimate business, but Madoff was the single largest market maker in the world," says lawyer Helen Davis Ch...
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