Bernie Madoff, a prominent investment advisor and former chairman of NASDAQ, was arrested by federal agents at his Manhattan apartment after confessing to his sons that his entire investment business was a fraud. Madoff admitted to running a Ponzi scheme that spanned decades, defrauding thousands of investors, including individuals, charities, and pensions, out of an estimated $50 billion. The scheme was revealed in the tumultuous context of the 2008 financial crisis, which had already shaken confidence in financial institutions and markets.

Madoff's firm had promised consistent, high returns to investors, attracting many due to his reputation and connections. However, as the financial landscape deteriorated, withdrawal requests surged, revealing the scheme's unsustainable nature. The magnitude of the fraud raised alarms about the effectiveness of regulatory bodies, particularly the Securities and Exchange Commission (SEC), which had previously investigated Madoff's firm but failed to detect the fraudulent activities.

Following his arrest, Madoff was charged with multiple counts of fraud, marking a significant moment in financial history. The fallout from this case affected countless lives, leading to massive losses for investors and triggering a reevaluation of regulatory practices in financial markets.