BulletProofBlog the blog on crisis communications

Bernard Madoff, the former NASDAQ Chairman who allegedly carried out the largest Ponzi scheme in American history, is expected to plead guilty on Thursday to up to 11 counts of money laundering, perjury, and wire, mail, and securities fraud in U.S. District Court in New York.

The 11 felony counts with which he has been charged carry a maximum of 150 years in prison - an especially onerous sword hanging over the head of the 70-year-old Madoff.

As I told Reuters in an interview earlier this week, one of the signature issues of the current financial crisis is identifying who' s to blame. Indeed, in order to restore confidence to the marketplace, it is critical that investors see perpetrators - and Madoff is only one - held accountable and punished with penalties commensurate with their crimes.

And to that end, the most watched element of this case will be the amount of restitution he is ordered to pay. At present, the government is seeking $170 billion in criminal forfeitures, an amount far in excess of what Madoff would likely be able to afford (only $1 billion has been recovered in liquidation thus far) - but that' s not the point. In fact, the pivot on which the perception of this case will turn for the government is that they tried to get some money back for the thousands of individual investors, business, charities, and other organizations that have seen their investments vanish.

In the Era of Accountability, punishing bad actors is absolutely essential to restoring investor confidence and encouraging needed reforms. This plea is a big win for the government - and they needed it. For the SEC and criminal authorities to be successful at prosecuting future cases and dissuading others from getting started, a thunderous message needed to be given.

The question of whether it was heard or not, only time will tell.