It has been referred to as the worst scandal the world has ever seen in the world of finance.  While that type of language is hyperbolic at best, there can be no denying that the world was sorely shaken when Bernie Madoff was revealed to be nothing more than a financial criminal.  He had been one of the most respected investors up to that point and now at the height of the modern financial crisis of our time this supposed rock in the storm was nothing more than another person that had been dishonest and ended up paying the price for it.

Bernie Madoff was a man that was so respected that a lot of people started wondering exactly how he could get away with things for such a long period of time.  It spurred on a lot of questions about the current existence of the financial system with most of those questions not returning particularly satisfying answers. 

While the Madoff scandal is one that will likely stay with us for a long time, these questions must be asked from a position of understanding.  For that reason, join us on a brief journey through the scandal itself, starting from the honest beginnings to the rise and fall of the dishonest operation that followed and eventually swallowed what started as an honest operation.

Before the Scandal

Bernie Madoff did not start life off as a financial luminary.  In fact, the opposite was quite the truth.  The fact of the matter is that when he was originally born, Madoff did not have any inkling of what lay ahead of him in life.  He worked originally as a lifeguard with installation of sprinkler systems being done on the side.  That was his life up until 1960.  By the time that year came around, Madoff had already put aside $5000 in savings.  By current standards that money would be worth around $35,000.

The firm that he started in 1960 with that amount of money was a trading business that specialized in the trading of penny stocks.  As the name implies, these are stocks that are worth peanuts in comparison to the big boys.  They are small start-up businesses or else companies that have fallen down and are looking to rebound.  Whatever the reason for the value might be, penny stocks are indeed stocks that you can get for pennies and sometimes a single penny per share in the business.

Trading these stocks under normal circumstances is a very risky thing to do.  It is just as likely that a particular company will fold and lose all of your money than it is that it will grow and justify your faith in the stock.  With merely $5000 of starting capital, Madoff decided that his best chance at big returns was through this and for that reason decided to cut his financial teeth on the penny stock market.  In this, he was helped by his father-in-law, a man that was responsible for referring to Madoff the first large circle of clients that he was able to enjoy.

It was during this point in time that Madoff Securities developed the NASDAQ system for the dissemination of quotes through the use of information technology.  It was to help compete with the larger firms that were already well entrenched in the New York Stock Exchange.  For that reason, Madoff will always at the very least be able to point to the NASDAQ system as being one of the major achievements in his life.  Whether that will be worth anything to history is another story as right now that achievement is more than overshadowed by the staggering amount of fraud that he is responsible for.

From the 1970s right on through to 2008, Bernie Madoff was certainly responsible for making some of his clients money.  However, as will become apparent later on in this discussion, that money was not made honestly.  It was essentially part of one of the largest Ponzi operations if not the largest one that the world has ever seen.  During this period of time however, he was certainly viewed with a mixture of awe and envy depending on the specific person that you talked to.

Former Gov. Rod Blagojevich’s brother has personally written to 10 members of Congress with an offer to testify before an ethics committee that last week re-launched its investigation of U.S. Rep. Jesse Jackson Jr. (D-Ill.).

Robert Blagojevich said Thursday that he sent letters to all the members of the U.S. House Committee on Ethics because: “I believe I have information I think will help them find the truth” on Jackson.

He offered his testimony or to be interviewed about Jackson’s effort to secure an appointment by then-Gov. Rod Blagojevich in late 2008 to fill the U.S. Senate seat left vacant with the election of President Barack Obama.

“Based on what I know, I believe Jesse Jackson Jr. has a lot of unanswered questions that he needs to answer,” Robert Blagojevich said. “There are a lot of unanswered questions he should be required to answer.”

Robert Blagojevich suggested he might have more details to share that did not yet come out. Tried with his brother in federal court last year, Robert Blagojevich testified in his own defense, telling jurors he was approached by two Jackson supporters on separate occasions in 2008 with an offer: Get his brother to give Jackson the Senate appointment, and Jackson would give the governor campaign cash. Robert Blagojevich was heading his brother’s campaign fund at the time.

Robert Blagojevich said Rajinder Bedi, a state official, met with him in late October 2008, offering more than $1 million for the seat on Jackson’s behalf. Bedi testified as a prosecution witness that he had met with Jackson earlier on the same day that he met with Robert Blagojevich and that both fund-raising and the Senate seat were discussed in Jackson’s presence. Bedi also testified that, when he passed along the offer, Robert Blagojevich turned it down.

The second approach, according to Robert Blagojevich’s testimony, came on Oct. 31, 2008. Jackson friend Raghu Nayak approached him with a $6 million offer — $1 million up front and Jackson would raise another $5 million for the governor once Jackson was appointed to the Senate, he said. He said he again turned it down.

“I very definitely got the impression that they were representing Jackson,” Robert Blagojevich sai

Addiction expert Dr. Robert Waldman was the first witness to take the stand at the involuntary manslaughter trial of Dr. Conrad Murray yesterday (October 28th). According to Eonline.com, Waldman was asked about the addictive powers of the sedatives given to Michael. He said, "I don't recall ever seeing a Demerol addiction." He added that if someone was withdrawing from the drug they would have "dire sweating, increased heart rate, muscular aches and pains, nausea, restlessness and insomnia."

After looking at the dermatological records of Dr. Arnold Klein, Waldman said that Michael had been receiving "above average dosages" of Demerol, which implied "that he is no longer getting the therapeutic effect from the prior dosages...There is evidence he was dependent on Demerol. He was probably addicted to the opiods."

• During cross-examination, the prosecution said that Demerol was not present in Michael's toxicology results and when repeatedly pressed by D.A. David Walgren as to whether he would diagnose MJ as addicted to Demerol based on those results, he said, "probably no."
• Walgren then asked, "If a patient asks you to administer a dangerous drug, a drug that could be harmful, would you refuse to administer that drug to the patient?" Waldman replied, "Absolutely."

STAR WITNESS TAKES THE STAND

Up next, anesthesiologist Dr. Paul White -- said to be the defense's star witness, took the stand. He testified that he started researching propofol in 1983 -- six years before it was approved by the FDA. He also stated that he has known prosecution witness Dr. Steve Shafer for 30 years.

He said, "I agreed to review materials for [the defense]. I was kind of perplexed that Dr. Murray was infusing propofol. It wasn't obvious to me." White said that the dosage that Murray said he gave to Michael should not have killed the singer. As for the use of propofol, White said it "could be the best possible agent for monitored anesthesia care."

• Dr. Conrad Murray has pleaded not guilty to involuntary manslaughter. If found convicted, he faces four years in jail.

An off-duty Harvey police officer fatally shot a man who opened fire early Thursday inside a crowded south suburban bar, fled and then fired more shots through the tavern’s front window.

“The officer performed commendably,’’ Burnham Police Chief Peter Belos said. “The suspect had no regard for anyone’s life, and the officer prevented further death and injuries.”

More than 20 customers were in the Little Brown Jug in Burnham at about 3:39 a.m. when the suspect opened fire and wounded one man, Belos said.

The gunman then began firing at the off-duty officer inside the bar after the officer identified himself as a law enforcement official. The gunman failed to hit the officer, ran out the door and began firing rounds into the front window of the bar, Belos said.

The officer ran after him, and they exchanged gunfire. The officer struck the gunman several times, said Belos.

The gunman was taken to a hospital in nearby Hammond, Ind., where he was later pronounced dead. The Lake County Coroner’s office in Indiana identified him as Ronnie C. Bobo, 34, who lived near the bar in Burnham.

The man Bobo allegedly shot suffered superficial injuries and was released from an area hospital.

Police were looking for another man who was with Bobo in the bar but did not shoot anyone. Detectives are reviewing videos taken from the bar, Belos said.

Belos said police do not know what prompted Bobo to start firing.