Should Madoff Victims be Bailed Out?
Another sad day on Wall Street today, when 65 year old hedge fund manager Thierry Magon de la Villehuchet was found dead in his Manhattan office of an apart suicide. It is said that Magon de la Villehuchet lost $1.4 billion of investor’s money. This is the extreme example of the type of destruction that Madoff has unleashed upon innocent people. The damages that Madoff has inflicted on his victims will be felt worldwide. As more victims come out, lawsuits are beginning to fly. Everyone wants to blame the SEC and the government for not having done the proper due diligence it should have done to stop Madoff years ago. However, should taxpayer’s be responsible for bailing out the victims of Madoff?
The sad fact of the matter is that many people who had money invested with Madoff were not just the ultra rich. His victims include regular everyday people that had entrusted their nest egg with Madoff. After all, his fund showed returns of 8% to 12% year after year. Madoff’s fund even during the dot com bust of early 2000 showed profits. These types of returns should have raised red flags among savvy investors. The sad fact of the matter was that very few raised questions. People continued to give Madoff more and more money up to the point that they had their entire nest egg with Madoff. These people, although victims, took huge risks when they entrusted their entire life to one individual. However, the lure of constant returns and this man’s supposed stellar reputation, kept investors coming back for more.
Those who invested are also their own victims of greed and complacency. One of the oldest adages known to us is not to keep all of our eggs in one basket. There is a reason for this saying being very true. People entrusted this one individual whose fund was not even registered with the Securities and Exchange Commission. Investors were used to a constant stream of income and adjusted their lifestyles accordingly. The fact of the matter is that no one ever questioned Madoff’s investment practices. More people should have demanded to see what this guy doing with their money.
I heard a very good quote on one of the financial networks today that made a lot sense. People want to be capitalists on the way up and socialists on the way down. This is a very true statement. No one wants government intervention when the economy is thriving. However, as soon as things collapse, everyone starts running to the government. In cases like this, the government can only bare some of the burden. Unfortunately, those who invested with Madoff did so with knowledge and without force. Thousands of people were duped by their own greed and lack of responsibility as well. Taxpayers should not have to bail out individuals who entrusted all of their money with Madoff. If we did than we would have to compensate other victims of fraud; like those who suffered huge losses from the now infamous Enron or World Com. Let the lessons learned from Bernard L. Madoff serve as an example to future investors. If it seams too good to be true, then it probably is.
Another sad day on Wall Street today, when 65 year old hedge fund manager Thierry Magon de la Villehuchet was found dead in his Manhattan office of an apart suicide. It is said that Magon de la Villehuchet lost $1.4 billion of investor’s money. This is the extreme example of the type of destruction that Madoff has unleashed upon innocent people. The damages that Madoff has inflicted on his victims will be felt worldwide. As more victims come out, lawsuits are beginning to fly. Everyone wants to blame the SEC and the government for not having done the proper due diligence it should have done to stop Madoff years ago. However, should taxpayer’s be responsible for bailing out the victims of Madoff?
The sad fact of the matter is that many people who had money invested with Madoff were not just the ultra rich. His victims include regular everyday people that had entrusted their nest egg with Madoff. After all, his fund showed returns of 8% to 12% year after year. Madoff’s fund even during the dot com bust of early 2000 showed profits. These types of returns should have raised red flags among savvy investors. The sad fact of the matter was that very few raised questions. People continued to give Madoff more and more money up to the point that they had their entire nest egg with Madoff. These people, although victims, took huge risks when they entrusted their entire life to one individual. However, the lure of constant returns and this man’s supposed stellar reputation, kept investors coming back for more.
Those who invested are also their own victims of greed and complacency. One of the oldest adages known to us is not to keep all of our eggs in one basket. There is a reason for this saying being very true. People entrusted this one individual whose fund was not even registered with the Securities and Exchange Commission. Investors were used to a constant stream of income and adjusted their lifestyles accordingly. The fact of the matter is that no one ever questioned Madoff’s investment practices. More people should have demanded to see what this guy doing with their money.
I heard a very good quote on one of the financial networks today that made a lot sense. People want to be capitalists on the way up and socialists on the way down. This is a very true statement. No one wants government intervention when the economy is thriving. However, as soon as things collapse, everyone starts running to the government. In cases like this, the government can only bare some of the burden. Unfortunately, those who invested with Madoff did so with knowledge and without force. Thousands of people were duped by their own greed and lack of responsibility as well. Taxpayers should not have to bail out individuals who entrusted all of their money with Madoff. If we did than we would have to compensate other victims of fraud; like those who suffered huge losses from the now infamous Enron or World Com. Let the lessons learned from Bernard L. Madoff serve as an example to future investors. If it seams too good to be true, then it probably is.
Labels: Bernard L. Madoff, Madoff scam, Madoff Victims
Credit Card / Financial news blog post by Todd Holliday at 8:16 PM 