NEW YORK AND LOS ANGELES — With Bernard L. Madoff sentenced Monday to 150 years in prison, his massive Ponzi scheme is likely to be felt for years as victims struggle to recoup their money, investors treat Wall Street with new suspicion and regulators scramble to crack down on all manner of financial wrongdoing.
Closing a chapter in the Madoff melodrama, a federal judge unexpectedly imposed the maximum possible sentence, jolting the legal community and electrifying many of those who had entrusted Madoff with their money.
The ruling by U.S. District Judge Denny Chin marked a culmination of public outrage at Madoff as well as at a litany of other scandals that have besmirched Wall Street in recent years.
The judge sent a message to financial professionals "who find themselves in a position to abuse victims," said George Jackson, a white-collar crime lawyer in New York. "And it was a signal to the victims that 'I hear you, I am sympathetic to your plight.' "
Along with a grinding bear market that has saddled Americans with once-unthinkable losses in their 401(k) plans and other portfolios, the Madoff saga has prompted a widespread reassessment of Wall Street, particularly of hedge funds, which are private pools of money that became highly coveted for their aura of exclusivity and superiority.
"The mystique of the private hedge fund investment has disappeared," said Thomas Whelan, chief executive of Greenwich Alternative Investments, a Stamford, Conn., firm that advises investors about hedge funds.
Madoff pleaded guilty in March to a record-setting Ponzi scheme that was audacious in its magnitude and duration. The scheme, said to have begun more than two decades ago, is estimated to have caused at least $13 billion in actual losses to investors.
Madoff was arrested in December after nearly running out of money because of heavy withdrawals by investors in the wake of the plunging financial markets. He had told his investors their accounts collectively were worth almost $65 billion, but most of that is believed to have represented fictitious profits.
Chin's ruling elicited an impromptu burst of applause from victims in the courtroom, who saw it as an acknowledgment of their suffering.
"Mr. Madoff was sentenced to life, as his victims are sentenced to life," Maureen Ebel, a 61-year-old widow from West Chester, Pa., said afterward.
