Bernard Madoff, the founder and president of Bernard L. Madoff Investment Securities and former chairman of the Nasdaq Stock Market, was arrested Thursday morning by Federal Bureau of Investigation agents and charged with criminal securities fraud by U.S.prosecutors.

The criminal complaint filed against ‘Bernie‘ Madoff alleges that he told senior employees that his business was “a giant Ponzi scheme,” according to a person familiar with the matter. The alleged scheme involved tens of billions of dollars, but the extent of investor losses wasn’t immediately clear.

“He’s one of the pioneers of modern Wall Street,” said James Angel, an associate business professor at Georgetown University in Washington. Madoff’s firm was among the first to automate market-making, in which a dealer continually buys and sells stock. The company was among the largest to offer “payment for order flow,” or paying to handle customer orders. “The exchanges didn’t like the practice and questioned whether customers got the best price,” Angel said.

Victims of the scam are said to be high net-worth individuals and hedge funds. Exactly how much money investors lost is still to be determined.

(Via Bloomberg)