MANHATTAN (CN) – A federal judge late Friday signed an order freezing the assets of legendary investor Bernard Madoff who is accused of running his firm as a giant Ponzi scheme. U.S. District Judge Louis Stanton appointed Lee Richards of Richards Kibbe & Orbe LLP as receiver in the financial fiasco with losses that, according to SEC investigators, may exceed $50 billion.
That level of loss would make the affair the largest Wall Street fraud in history.
Judge Stanton issued the order Friday afternoon, freezing the assets of Madoff and those of his firm. Lee Richards of Richards Kibbe & Orbe LLP has been appointed receiver.
On Wednesday, the SEC claims, Madoff called two of his top executives to his Manhattan apartment, where he told them that he was “finished,” that he had “absolutely nothing,” and that “it’s all just one big lie … basically, a giant Ponzi scheme.”
Madoff, 70, founded Bernard L. Madoff Investment Securities in 1960. It oversaw more than two dozen funds totaling $17 billion.
At his Wednesday meeting, the day before he was arrested, “Madoff stated that the business was insolvent, and that it had been for years,” according to the SEC’s federal complaint. “Madoff also stated that he estimated the losses from this fraud to at least approximately $50 billion.”
In a press release, the SEC said, “According to regulatory filings, the Madoff firm had more than $17 billion in assets under management as of the beginning of 2008. It appears that virtually all assets of the advisory business are missing.”
The SEC complaint adds: “At Madoff’s Manhattan apartment, Madoff further informed the Senior Employees that, in approximately one week, he planned to surrender to authorities, but before he did that, he had approximately $200-300 million left, and he planned to use that money to make payments to certain selected employees, family and friends.”
But Madoff was arrested the next morning, at his Manhattan apartment.
During his long career, Madoff served as vice chairman of the National Association of Securities Dealers, chairman of its New York region, a member of its board of governors, and was a member of the NASDAQ board of governors, of its executive committee, and was chairman of its trading committee.
Madoff was released on $10 million bond.