No evidence Madoff traded a single share for clients, says regulator•

No evidence Madoff traded a single share for clients, says regulator• Watchdog has examined books since 1960
• Statements showing trades now look fictitiousJames Doran in New York The Guardian, Friday 16 January 2009 Article historyThe mystery surrounding Bernard Madoff's $50bn Ponzi scheme deepened further last night as it emerged there was no evidence the alleged fraudster traded a single share on behalf of his clients.

America's financial industry regulatory authority, told the Guardian that in more than 40 years examining the books of Madoff's brokerage, investigators never saw a share traded on behalf of his investment advisory business.

Madoff is said to have confessed that his investment business was a Ponzi scheme that siphoned $50bn from friends, charities and thousands of others. The brokerage, meanwhile, was a legitimate business trading shares wholesale on behalf of investment banks, mutual funds and other institutions.

"Our investigations of Bernard Madoff's broker dealership showed no evidence that any shares were ever traded on behalf of his investment advisory business," a spokesman for Finra said, adding that the regulator had been looking at his books since 1960.

Clients of Madoff's investment advisory business received statements that showed hundreds if not thousands of trades made by the brokerage every year. Richard Rampell, an accountant from Florida who had several clients who were victims of Madoff's alleged scam, saw dozens of statements.

"Everything I saw on those statements told me that Madoff was clearing his own trades. There was no third party mentioned on any of those statements," Rampell said. "Different firms do things differently. For example, if I saw a statement from Bear Sterns, it would show that the trades were cleared by a third party like Goldman Sachs. If I saw a statement from Merrill Lynch, it would show that the trades were cleared in house. Madoff's statements were just like Merrill Lynch statements. They showed the trades were cleared by his own firm."

Rampell saw his first Madoff statement in 1985, describing it as "just incredible". He said the document showed dozens and dozens of the 1099 and 1099B tax forms required every time a security is bought and sold for a profit. It now appears the statements were fictitious as there is no evidence to prove Madoff bought and sold a single share on behalf of his clients.

Steve Harbeck, the chief executive of the Securities Industry Protection Corporation who is overseeing the Madoff bankruptcy to ensure clients get compensation, said: "I do not have any evidence to contradict that. This is an amazing story that something like this could have gone on undetected for so long."

Harbeck said he believed Madoff was defrauding clients at least 28 years ago. "I have seen evidence to that end and I have nothing to contradict it," he said.

The securities and exchange commission, America's financial regulator, had been warned about Madoff's firm since at least 1996. Sources close to the investigation said last night that had the SEC asked Finra for evidence of how Madoff was making such profitable trades, the fraud would have been uncovered more than a decade ago.

Madoff's lawyer, Ira Sorkin, declined to comment.