Bernie Madoff Turned Down $1 Billion


Just six year’s ago, Bernie Madoff stood to make $1 billion by selling his business to Goldman Sachs or Charles Schwab, Steve Fishman writes in this week’s New York magazine. Unfortunately, he was already so deep in his scam he couldn’t afford to let their diligence teams look too deeply into how he made his money scammed his way to prosperity.

From New York Magazine:

As late as 2002, Madoff could probably have sold Bernard L. Madoff Investment Securities for as much as $1 billion. Both Goldman Sachs and Charles Schwab were said to be interested in the market-making business. But Bernie waved off his buyers. “I couldn’t work for anybody,” he said. “My whole family works here.”

One of Bernie’s competitors later reflected on Bernie’s response. “In part, it resounded with me,” he says. “In part, it made no sense. He had a chance to write a billion-dollar ticket. Why wouldn’t he sell it?”

Now, of course, the answer is clear. Madoff was in much too deep to turn back. The market-making and money-management businesses were both on the books; they shared funds. And after 2002, the market-making business began to decline rapidly and was, at least according to the records, being subsidized by Bernie’s money-management business. Bernie couldn’t possibly sell the business. He couldn’t let anyone see the books.