Fascinating read on the Madoff Ponzi Scheme

[droski]

This guy wrote a letter to the SEC in 05 proving that madoff couldn't possibly be generating these returns (as reported by the WSJ today). It's a bit lengthy, but worth a read if you find this type of stuff intreesting.

http://online.wsj.com/documents/Madoff_SECdocs_20081217.pdf

 

[BigPapaVol]

After reading that, I'm shocked this wasn't blown up long before. Makes me think that someone waited for the right time to blow it up.

 

[VolsNSkinsFan]

or someone was being paid off to keep their mouth shut

 

[jdsa]

The press keeps repeating the name "Madoff," but the shear amount of complicity required to keep this fraud going for as long as it did is astonishing.

 

[BigPapaVol]

or someone was being paid off to keep their mouth shut

there were too many someones.

Looks to me like the SEC finally decided that it can't really make the market any worse than it is today and people screaming out of hedge funds was going to make this problem evident from the other side anyway.

 

[droski]

After reading that, I'm shocked this wasn't blown up long before. Makes me think that someone waited for the right time to blow it up.

it's unbelievable. shows what having good political connections can do for you.

 

[WA_Vol]

I heard on the radio what caused it to collapse was as the market slid, some of his investors wanted their money back, 7 billion dollars worth.

Madoff didn't have it. So he's taking the fall to try and save his son's by allowing them to turn him in, as if they didn't know it was a fraud all along.

 

[droski]

So he's taking the fall to try and save his son's by allowing them to turn him in, as if they didn't know it was a fraud all along.

that's my guess too. they'd have to be real dumb to not know what was going on. you don't keep this big of a fraud going long term without a lot of help.

 

[BigPapaVol]

I heard on the radio what caused it to collapse was as the market slid, some of his investors wanted their money back, 7 billion dollars worth.

Madoff didn't have it. So he's taking the fall to try and save his son's by allowing them to turn him in, as if they didn't know it was a fraud all along.

clearly Ponzi schemes don't work if the investors used to pay earlier investors want their money back too soon. It's exactly what happened and he got busted. Otherwise, the SEC might very well still be sitting on the sidelines watching this thing.

Kinda blows your Swiss account theory out of the water.

 

[WA_Vol]

clearly Ponzi schemes don't work if the investors used to pay earlier investors want their money back too soon. It's exactly what happened and he got busted. Otherwise, the SEC might very well still be sitting on the sidelines watching this thing.

Kinda blows your Swiss account theory out of the water.

He probably has million put away, not billions.

I'm guessing he planned to go in hiding and never be seen again once he realized his scheme would be exposed. For whatever reason, his sons turned him in instead, most likely to cover their own butt.

 

[droski]

I think he had millions put away to go in hiding and never be seen from again when it looked like his scheme would be exposed. For whatever reason, his sons turned him in instead, most likely to cover their own butt.

he probably was so arrogant he thought he would never get caught. he did go unnoticed for a very long time. my guess is he said to his sons "i'm screwed! save yourself."

 

[gsvol]

it's unbelievable. shows what having good political connections can do for you.

Investors in Madoff's hedge funds may have lost anywhere from $17 billion to $50 billion. Investment details aside, Madoff was a major player in Washington politics -- for the Democrats.

Since 1993, the Madoff clan has donated more than $380,000 to individual politicians and political action committees, including $100,000 to the Democratic Senatorial Campaign Committee. In particular, DSCC head Sen. Chuck Schumer (the other senator from New York) received money from Madoff -- $39,000 for his 1998 and 2004 races.

One will search in vain for such details in Leftmedia stories about Madoff, however. Apparently, it isn't worth a mention.

 

[SavageOrangeJug]

WASHINGTON – The man who waged a decade-long campaign to alert regulators to problems in the operations of fallen money manager Bernard Madoff told Congress Wednesday that he had feared for his physical safety.

Harry Markopolos also assailed the Securities and Exchange Commission in his first appearance before lawmakers. The SEC failed to act despite receiving credible allegations of fraud from Markopolos about Madoff's operations over a decade.

Because of the agency's inaction, "I became fearful for the safety of my family," Markopolos said.

He told a House subcommittee hearing that "the SEC is ... captive to the industry it regulates and is afraid" to bring big cases against prominent individuals. The agency "roars like a lion and bites like a flea," Markopolos said.

Madoff tipster Harry Markopolos assails SEC

 

[gsvol]

Madoff tipster Harry Markopolos assails SEC

Markopolos blames SEC turf battles for Madoff failure.

“In 2000, (a U.S. Securities and Exchange commission official) warned me that the relationship between the New York and Boston SEC offices was about as warm and friendly as the Yankees-Red Sox rivalry and that New York doesn’t like to receive tips from Boston,” Whitman resident Harry Markopolos testified today before Congress.