Mr. Madoff got his start with money he saved working as a lifeguard on Rockaway Beach, on the edge of New York, and installing sprinkler systems, according to a 2000 article in Wall Street + Technology, a trade publication. Bernard L. Madoff Securities LLC began as a firm that operated outside the world of the clubby New York Stock Exchange. Mr. Madoff's firm, like several at the time, was known as a "third market" trading company -- buying and selling stocks that weren't listed on the NYSE.  Mr. Madoff got his big break in 1975, when fixed commissions for stock trades were abolished. Buried in the rule change was a loophole that would allow him to trade blue-chip stocks on the Big Board that had once been off limits to non-member firms such as his.  Mr. Madoff handled large blocks of trades for brokerage giants A.G. Edwards & Sons and Charles Schwab & Co. He profited from the "spread," or difference between the offer and sale prices for stocks, and attracted clients with the legal but controversial strategy of paying them a penny or so for every share they traded through his firm.  While Mr. Madoff's money-management business is getting all the attention today, his original success and reputation was built upon this powerful stock-trading business. By the 1990s, his firm was trading up to 10% of Nasdaq shares on some days.  Mr. Madoff's competitive advantage in those early years was technology built with help from his younger brother Peter. Cerebral and reserved, Peter Madoff joined the company in 1970 after graduating from law school. With the system, traders at other firms could electronically buy and sell at the best prices available on Nasdaq.  When he wasn't working, Mr. Madoff lived in a modest ranch house in Roslyn, N.Y., a small town on Long Island's North Shore. About 25 miles from Wall Street, Roslyn had a close-knit Jewish community and family-friendly neighborhoods. Mr. and Mrs. Madoff spent summers with their sons, Mark and Andrew, in Montauk, a former fishing village on Long Island's east end. Mr. Madoff sometimes commuted from Long Island by seaplane.  In 1984, Mr. Madoff and his family moved into a sprawling duplex on Manhattan's Upper East Side. One former resident was Evan Galbraith, a onetime U.S. ambassador to France who died this year. As chairman of the building's co-op board, Mr. Madoff was highly organized and meticulous, according to a former resident.  Peter Madoff gradually took on more of the firm's trading business and Bernard lobbied in Washington for regulatory changes that would make it easier to trade stocks electronically. He also became more involved in Nasdaq, serving as its chairman in 1990, 1991 and 1993.
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