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Bernie Madoff, who is currently serving a 150-year sentence for running a Ponzi scheme, wrote a letter to CNBC warning them that the markets lack transparency, and suggested that institutions are buying and selling privately outside the stock exchange.

“Institutions have always attempted to guard this buy and sell information from exposure to the market for fear of being front run,” Madoff writes. “Certainly they are entitled to have this right of confidentiality. That being said, the more secret this information, the more valuable this information is to those that can obtain it. Therein lies the problem. It is nave to think that there will be no leakage of this information.”

The letter was typed on Christmas Eve letter from the medium security federal prison in North Carolina, which Madoff also stated that insider trading has been around “forever.”

“(O)ne would be led to believe that with the recent spate of insider trading prosecution that insider trading is a new development,” Madoff writes. “This is false. It has been present in the market forever, but rarely prosecuted. The same can be said of front running of orders.”

He also rails against what he calls a lack of transparency in the financial markets, and says the growth of hedge funds is forcing market players to take outsized risks in order to earn decent returns.

“It has been this additional layer of costs that have created the need for more risk to be taken to earn worthwhile returns. This has created a minefield of regulatory problems involving the very reasons that the desire for a lack of transparency has grown. Both of these areas are going to be the greatest challenge that both the industry and the regulators are going to face,” Madoff wrote.

Madoff has granted only a handful of interviews since he went to prison in 2009. More recently, he has declined to speak on the record about his case. But he was willing to share some views about the financial markets in the e-mail, which he sent to CNBC and a handful of attorneys and academics he has been communicating with.

Before confessing four years ago this month to the largest investment scam in U.S. history, Madoff was prominent in the financial community. He served as a non-executive chairman of the NASDAQ, and his firm was once among the largest market makers on Wall Street.