This is more of a crime story than financial news, but as a $65B scandal, it is too large to go entirely without mention. Today Bernie Madoff plead guilty to charges related to the fraudulent operation of an investment firm that lost its clients everything.
It has been described as a Ponzi scheme, but I doubt it started that way. I can see it starting off as a routine mutual fund that might have legitimately done well for awhile—I mean it would have been hard to go wrong for the past decade until Bear Stearns unfolded. But then it might have gotten tied up in some bad derivatives, and stumbled, and then rather admit to a loss or decline in performance, Madoff simply reported numbers that looked as good as ever, and when people withdrew money, he simply paid it from incoming deposits rather than investing it.
As poor performance and withdrawals consumed the wealth of the fund, all further withdrawals were paid with new investments—which works only so long as the rate of withdrawal is less than the rate of new investment, after which it is over, the money is long gone, and the situation is revealed for what it is.
So in all likelihood Madoff will spend the rest of his years in jail. There isn't much else to say here, other than a lesson to be had about trusting other people with your money.