How Ponzi mastermind Bernie Madoff enabled the US retail trading boom –

How Ponzi mastermind Bernie Madoff enabled the US retail trading boom

Bernard L. Madoff ran the world’s largest Ponzi scheme. He was additionally a key pioneer of the enterprise mannequin that helps underpin “commission-free” inventory brokerage for on a regular basis merchants. In some respects, Madoff is the godfather of at present’s retail buying and selling increase.

Madoff ran his funding fraud from the 17th flooring of Manhattan’s Lipstick Constructing at 885 Third Avenue. Two flooring up, he and his household had a separate buying and selling operation that burnished his credentials on Wall Road. The buying and selling division of Bernard L. Madoff Funding Securities was auctioned off  after the Ponzi scheme unraveled in 2008, and the cash was used to compensate victims. That is the story of that buying and selling operation, which was seen as a revered trailblazer on Wall Road, and is predicated on interviews with folks within the trade throughout Madoff’s day, in addition to books and articles concerning the occasions.

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Madoff’s agency was an vital advocate of cost for order circulation (PFOF), which has change into a important cash maker for brokerages like Robinhood and Charles Schwab (Schwab was an early Madoff buyer). Brokerages receives a commission for his or her clients’ orders from market makers—up to date variations of what Madoff’s buying and selling firm was.

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The put up How Ponzi mastermind Bernie Madoff enabled the US retail buying and selling increase appeared first on Quartz.

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