Madoff makes millions on a real investment

Convicted Ponzi schemer Bernie Madoff invested in a legitimate biotech company and saw his stake double in value. Who gets the profit?

By Aimee Picchi Feb 4, 2013 3:44PM

File photo of Bernard Madoff leaving federal court in New York on Jan. 14, 2009 (Gino Domenico/Bloomberg via Getty Images)Convicted con artist Bernie Madoff, whose name has become a byword for swindler, actually made an investment that's paid off -- and it's all real.


Madoff invested $2.2 million in a biotechnology company called Stemline Therapeutics (STML), which went public on Tuesday in the first biotech IPO this year, according to the New York Post.


With the company selling shares at $10 each, Madoff's $2.2 million investment was turned into $5.5 million. 


Of course, most of Madoff's other "investments" turned out to be a sham. Madoff is thought to have masterminded the biggest U.S. financial fraud ever, convincing his clients that he was generating steady returns through his investing acumen. In reality, he admitted in court, when clients wanted to cash out, he paid them with money that belonged to other clients.


Madoff is serving a 150-year sentence in a federal prison. 


The investment in Stemline Therapeutics may provide some relief to his victims, the Post notes. 


A court-appointed trustee, Irving Picard, has filed a lawsuit against a Madoff family fund seeking to grab the winning investment on behalf of the victims. Madoff's son Andrew is the "interim manager" of Madoff Family LLC, according to Stemline's prospectus. The Madoffs own 515,203 shares of the company, or about 6.9% of its post-IPO shares, the regulatory statement notes.


Picard's suit states that the Stemline shares rightfully belong to Madoff's former clients.


Stemline develops treatments for cancer tumors and cancer stem cells, but has yet to bring in revenue from its operations, according to its prospectus.


More on moneyNOW


128Comments
Feb 4, 2013 7:17PM
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Madoff should have been executed on national television. Instead he gets 3 squares a day and a warm bed to sleep in while his victims suffer in the real world.
Feb 4, 2013 7:09PM
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Why did he still have it in the first place? His whole fam damily should be in jail.

Feb 4, 2013 7:05PM
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The question is where did he get the $2.2 million. Didn't he have to give all his money to the people he scammed?

Feb 4, 2013 6:49PM
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Plain and simple "if it sounds to good to be true" than guess what? Greed supersedes...Shame but should've, could've, and would've doesn't work. Next time do a more exhaustive research! Go thru a  "reputable company'' i.e. Edward Jones. Stupid is as stupid does!
Feb 4, 2013 6:48PM
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Who should get the profits????? Stupid question.
Feb 4, 2013 6:36PM
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Stemline is guilty of "receiving stolen property"!

 

Feb 4, 2013 6:22PM
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How about if we were to assign him the opportunity to run a brokerage with oversight of a special board employed by the state government. The goal of the brokerage is to get reimbursement for his victims to an appropriate degree. He has skills of being able to carry out surveillance of the market and do what seems most profitable for whatever he sets his mind to. The idea of his prison sentence? If there were a machine that could sense whether a person has "turned around" inside and really accepted that there are just some things you must never do and he wouldn't do them anymore, why would we waste money on any support of a person in any prison ever? There is no machine though, that I'm aware of. Maybe, one could be designed and we'd save ourselves a load of money. This machine of which I speak deserves some consideration along with other projects which may never come to fruition, but there is always hope at least.
Feb 4, 2013 6:21PM
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We al know him as Capt. Picard. Madoff Family LCC should have abank balance of Zero.
Feb 4, 2013 6:21PM
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hell it isnt any diff than what the oil companys are doing to us.Good ole ceos of exon moble bp and others are lining their pckets at our expence and they dont go to jail.
Feb 4, 2013 6:15PM
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Madoff got 150 years for doing exactly what Social Security does every day.

It is a Ponzi Scheme.

 

Feb 4, 2013 6:14PM
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The lions share will be split with attorneys.    The actual victims dont get crap

.

A class action law firm may get $10 million but each of the class members get a check for fifteen dollars and thirteen cents.

Class actions lawyers use us a placeholders in their suits against companies.

Enron was like a shark feed.

Feb 4, 2013 6:05PM
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Chicago Man, in response to you, I am a 58 year old woman who invested, I am not a rich person,  but lost my shirt. In the last past 8 months I have incurred 450 thousand dollars in medical bills. This money could help. You see I can't get health insurance since I have pre-existing medical problems. You don't need to call everyone who invested names. I hope it never happens to you
Feb 4, 2013 5:58PM
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I'm sure it will go where all real funds in legal cases go...to the lawyers.
Feb 4, 2013 5:51PM
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Big banks got way more than a slap on the wrist!!  They got TAXPAYER FUNDED BAIL-OUTS / paid MINISCULE FINES / PAID MINISCULE IN SETTLEMENTS (approved by the bank supporting AG of Iowa / GOT TO RAISE FEES (generating even more profits on the back of the working men and women!!!

 

Compared to the big banks,  Bernie, and his family are angles!!!!

Feb 4, 2013 5:47PM
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HOw is this different from the national debt?
Feb 4, 2013 5:28PM
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His victims should get any money he makes until they are completely repaid, even if that means getting a judgment against his estate after he dies.
Feb 4, 2013 5:22PM
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It is really too bad that every one of the crooks invovled with and causing the finanicial debacle are not breaking bread with 'ol Bernie in the big house. Oh, but then who would finance and funnel all the billions to elect and re-elect the crooks uh, I mean politicians?

 

Hope the profits can go to help the victims.

Feb 4, 2013 5:09PM
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Greedy rich investor went for big unbelievable retunes on their money to live king's lifestyle. They did and they lost like lot of day traders.

 

I have no sympathy for them. Crooks calling a crooks a crook, is their bottle. Government should not spend any money except for what may be their interest. Most these rich will right off as investment loss and get plenty kick back in taxes.

 

If they have problem, let private lawyers fight for them with their own arrangement.

Feb 4, 2013 5:03PM
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It's a no-brainer, that 5.5 million should go to his victims.
Feb 4, 2013 4:52PM
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That profit that was made should have been paid back to the people that invested with him and lost Millions!
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