Madoff to Plead Guilty in Ponzi SchemeOn Thursday, Bernard Madoff will plead guilty to fraud charges in what is being called the largest Ponzi scheme in U.S. history, said his lawyer Ira Sorkin in a New York court on Tuesday. When first arrested in December, Madoff admitted to defrauding investors of up to $50 billion over a period of many years.
Madoff, according to his lawyer, will admit he directed the fraud. Prosecutors say the total of the Ponzi scheme the 70-year-old investment company owner hid may reach $64.8 billion. The government prosecutors say Madoff, who is free on $10 million bail, may face 150 years in prison.
Despite speculation that a plea deal had been worked out, the Assistant U.S. Attorney Marc Litt says there is no plea agreement, which means Madoff must plead guilty to 11 counts he faces in the criminal information filed on Wednesday.
Madoff is charged with securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the U.S. Securities and Exchange Commission and theft from an employee benefit plan, says Litt.
Stocks Rally On Citigroup News
The stock market rallied on broad gains across all sectors with news from Citigroup that it will see a profit in the first quarter of 2009, leading the Dow Jones industrial average to gain 379 points by the end of the trading day.
This follows Monday's session where the Dow ended at its lowest point since April 15, 1997. Financial shares led the broad rally. The S&P 500 index gained 5.8 percent after ending Monday's session at its lowest point since September 12, 1996. The Nasdaq composite rose 6.3 percent after ending at its lowest point since October 9, 2002.
Citigroup's shares jumped 36 percent. Bank of America, Wells Fargo, Morgan Chase, Goldman Sachs, and Morgan Stanley were among the stocks rallying. The KBW Bank sector index climbed 9 percent. In futures trading, Citi was up to $1.60 per share on Wednesday.
Other news sparking the rally included Rep. Barney Frank's comment that the uptick rule could be reinstated. The uptick rule limits short sellers from adding to a downward movement of a stock that is already dropping. Traders make money short selling when the price of a stock falls. Restrictions on short selling were removed in July 2007, and observers say ending it added to the selling in the financial sector since then.