Madoff started his firm in 1960 with $5,000 that Madoff earned from working as a lifeguard and sprinkler installer.
He further secured a loan of $50,000 from his father-in-law which he also used to set up Bernard L. Madoff Investment Securities LLC and his company grew to such a point that several family members ended up working for him.
His younger brother, Peter, was Senior Managing Director and Chief Compliance Officer, and Peter's daughter, Shana, was the compliance attorney.
Madoff’s sons, Mark and Andrew, worked in the trading section, along with Charles Weiner, Madoff’s nephew. Andrew Madoff had invested his own money in his father's fund, but Mark stopped in about 2001.
Federal investigators believe the fraud in the investment management division and advisory division may have begun in the 1970s. However, Madoff himself stated his fraudulent activities began in the 1990s.
In the 1980s, Madoff's market-maker division traded up to 5% of the total volume made on the New York Stock Exchange.
Madoff was the first prominent practitioner who paid a broker to execute a customer's order through his brokerage, called a legal kickback, which gave Madoff the reputation of being the largest dealer in NYSE-listed stocks in the U.S., trading about 15% of transaction volume.
By 2000, Madoff Securities, one of the top traders of US securities, held approximately $300 million in assets. The business occupied three floors of the Lipstick Building, with the investment management division, referred to as the hedge fund, employing a staff of approximately 24.
Madoff ran a branch office in London, separate from Madoff Securities, which employed 28, handling investments for his family of approximately £80 million.
Two remote cameras installed in the London office permitted Madoff to monitor events from New York.
