
23.2K
GRBernard Madoff’s Ponzi scheme collapsed in 2008 when massive withdrawal requests exposed the lack of real funds behind his long running fraud.
For years, he paid earlier investors using new money instead of actual profits, creating an illusion of steady returns, but when the financial crisis triggered panic, investors demanded billions he could not provide
As withdrawals surged, the scheme ran out of cash, forcing Madoff to confess to his sons, who reported him, leading to his arrest by the Federal Bureau of Investigation and the exposure of one of history’s largest frauds
Despite earlier warnings from Harry Markopolos, it was the liquidity crisis that finally revealed the truth, showing how market stress can uncover hidden risks and collapse unsustainable systems
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