Bernie Madoff (2000): Markopolos submissions begin

Bernard L. Madoff Investment Securities operated a legitimate market-making and proprietary-trading desk that helped computerize Nasdaq execution. Separate from that desk, an investment-advisory practice issued account statements claiming a split-strike conversion strategy and unusually smooth returns.

After the arrest, court-appointed professionals found that the advisory side had not been executing the reported strategy for customers at the scale the statements implied. Customer money had been commingled and used to meet withdrawals and personal outflows, a pattern the plea allocution accepted.

How the collapse reached a courtroom Redemption requests surged in late 2008 as markets fell. Madoff told his sons, who worked at the firm, that the advisory business was a fraud; they contacted counsel, who notified federal authorities. The FBI arrest followed the next day. The criminal case did not go to a contested trial on guilt. The March 2009 plea, the June 2009 sentencing transcript, and later prosecutions of aides and family members supplied the factual core that civil recovery then used.