Bernie Madoff (2006): Investment-adviser registration · 478

Irving H. Picard, appointed trustee under the Securities Investor Protection Act, spent the following decade reconstructing transfers and recovering principal for allowed claims. The case sits in the public record as a collapse of supervision as much as of a firm: the SEC’s own inspector general later documented missed warnings that had reached the agency years before the arrest.

What the Madoff record actually shows The docket, the SIPA liquidation, and the SEC inspector-general file are the primary sources. They describe a long-running advisory fraud that ended when redemptions in the 2008 crash exceeded cash on hand. 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.