He tried a year at Brooklyn Law School before devoting himself full time to investing. He and his wife settled in Roslyn, on Long Island, to raise their two sons.
From his firm’s first Manhattan offices, at 39 Broadway, then at 110 Wall St., Madoff traded penny stocks and participated in the push to computerize the over-the-counter market.
Innovator Image
That push led to the creation of the Nasdaq exchange. It also allowed Madoff “to add a few brushstrokes each year to his portrait as a committed market innovator, an ally in the crusade to drag the nation’s tradition-bound markets into the modern age,” according to Henriques.
“I was very driven,” Madoff said in a 2011 interview with the Financial Times. “But I was always outside the club, the club being the New York Stock Exchange and white-shoe firms. They fought me every step of the way.”
When, exactly, Madoff began cooking the books was the subject of dispute.
During his guilty plea in court, Madoff said, “To the best of my recollection, my fraud began in the early 1990s,” when a bear market was making it impossible for him to “satisfy my clients’ expectations.” His response, he said, was to claim he was employing a strategy, which he called “split strike conversion,” using well-timed investments in and out of Standard & Poor’s 100 Index companies, hedged by options contracts in those same stocks.
‘Gray Area’
Henriques said Madoff told her he first crossed into a legal “gray area” sometime after the October 1987 market crash, when he began arranging “synthetic” trades to help two clients—Norman Levy, a New York real estate broker who died in 2005, and investor Jeffry Picower, who died in 2009—avoid owing taxes on short-term stock profits.
Though he said the actual Ponzi scheme began in 1992, he “did not deny that the roots of his Ponzi scheme were planted in the cash demands he faced following the 1987 crash,” Henriques wrote.
In a 2011 interview with CBS’s “60 Minutes,” Ruth Madoff said she and her husband tried to kill themselves two weeks after his arrest, while he was free on bail. She said they took pills, probably Ambien, went to sleep, and then woke up.
Stephanie Madoff Mack, who was married to Madoff’s son Mark, said in a 2011 book that, about a month after her husband’s 2010 suicide, she wrote an angry letter to her father-in-law blaming him for the death.
She said Madoff wrote back a few days later, saying: “I blame myself for everything that has happened and nothing will ever change this.”
—With assistance from David Glovin, David Voreacos and Erik Larson.
This article was provided by Bloomberg News.