Fortune breaks open a whole new angle on the Madoff story:
Accused Ponzi schemer Bernard Madoff was not the first person in his close-knit family to run afoul of federal authorities. A broker-dealer firm registered in the name of Madoff’s mother, Sylvia, was effectively forced to close by the U.S. Securities & Exchange Commission more than 40 years ago.
In August 1963, the SEC announced it was “instituting proceedings…to determine whether” 48 broker-dealers, including “Sylvia R. Madoff [doing business as] Gibraltar Securities,” had “failed to file reports of their financial condition…and if so, whether their registrations should be revoked.”
An SEC litigation release a month later announced hearings in the case of Madoff and many of the other firms in question.
Then, in January 1964, the SEC dismissed administrative proceedings against a number of the firms, including Madoff’s, in what appeared to be a deal: No penalties if you promise to stay out of business. Read the whole thing >
So is this a multi-generational fraud? The article goes onto say that none of Madoff’s friends recall his mum having been in the business, but that his dad was a stockbroker of sorts.
You can read the SEC’s announcement, that Sylvia Madoff withdrew from the business below.