At age 55, Madden is enjoying his current success as owner of a nearly $1 billion shoe empire, but the road to becoming one of the most revered names in footwear did not come without its dark days. In 2001, Madden’s financial affairs were closely entangled with Long Island “pump and dump” brokerage Stratton Oakmont, co-founded by Madden’s childhood friend Danny Porush. “Oh, God, it was a terrible mistake,” Madden recently told The New York Times. “At the time it was just hubris. We thought we were clever.”
Charges were filed against Madden in Federal Court in New York State, alleging SEC violations. Because the violations weren’t criminal in nature, the SEC was seeking to recover $1,637,000 in a combination of illegally avoided losses and interest, as well as a civil penalty.
In 2002, Madden was convicted of stock manipulation and money and securities fraud. He was sentenced to 41 months in prison, and was made to resign as CEO from Steve Madden Ltd. and from the board of directors.
Shortly after resigning as CEO, Madden set himself up as a creative consultant with Steve Madden Ltd., a position for which he drew $700,000 even when he was in prison. Madden served in a federal prison at Eglin Air Force Base, and later Coleman Federal Correctional Complex, near Ocala. Florida. Madden was released into a New York City halfway house in April 2005. After his release from a halfway house, he was restricted to home confinement for a period.
But all of that is now behind Madden, who is using his wealth to help various philanthropic efforts. Last year, Madden and his wife Wendy donated $1 million to the Two Ten Footwear Foundation, a charity that offers financial assistance, counseling, community resources, and scholarships to those working in the footwear industry. No fees are required and membership is not needed to benefit from their services. Additionally, Two Ten offers many opportunities for community building within the footwear industry – including events, community service projects and online resources.
“I’ve met so many great people and have been lucky that I love what I do,” Madden said. “I’ve been given this lucky break, and we’ve done very well – better than I should have – and I just want to give back.”
This year, Mr. Madden’s transgressions will be immortalized in The Wolf of Wall Street, a movie directed by Martin Scorsese about Stratton Oakmont, the investment firm that gave Mr. Madden shares in initial public offerings that he traded illegally. But his past does not seem to bother his forever-young customer base.
Madden’s massive shoe empire not only includes his Steve Madden and Steven lines but now also encompasses the shoes for Mary-Kate and Ashley Olsen’s trendy Elizabeth and James label, and Superga, the 100-year-old Italian sneaker company.
Madden recently bailed out a few notable friends – iconic New York designer Betsey Johnson, who filed for Chapter 11 this year, and Kari Sigerson, half of the famed Sigerson Morrison designing duo, who were fired from their namesake brand in a business deal gone very, very bad.
“My original intent was to give them advice as a friend, and we were able to work together,” says Madden about Sigerson. “And I’m a huge fan. Always was a huge, huge fan.”Maddensays 7B, Sigerson’s new line, will hit Barneys New York this spring.