NEW YORK - A Wall Street advisor and former chairman of the Nasdaq stock market was arrested Thursday for fraud after allegedly admitting to running a "giant" pyramid scheme, prosecutors announced.
Bernard Madoff, 70, faces a maximum 20 years prison and a fine of up to five million dollars if convicted on the securities fraud charge, prosecutor Lev Dassin and the FBI said in a statement.
According to the statement, Madoff on Wednesday told his employees at Bernard L. Madoff Investment Securities LLC, a securities broker, that an investor advisory business he had been running in parallel was fraudulent.
Madoff filed with the Securities and Exchange Commission on January 7 that his investor advisory business served 11 to 25 clients with about 17 billion dollars in assets under management.
But Madoff allegedly told his employees that he was "finished," that he had "absolutely nothing" after losing approximately 50 billion dollars.
According to the prosecutor`s statement, he said he had run "a giant Ponzi scheme" -- essentially a pyramid scam.
He told the employees he would surrender himself to the authorities after using his remaining 200-300 million dollars to pay selected employees and family and friends, the statement said.