Bernard L. Madoff Goes To Jail
On Thursday March 12, 2009 disgraced financier Bernard L. Madoff reported to jail to serve time for what has been called the largest Ponzi scheme ever uncovered. Crowds of people stood outside, many of them victims, wanting to get a chance to see justice served. “Madeoff” pleaded guilty before the Judge Denny Chin and was hauled off to what many say will be the rest of his life behind bars. “Madeoff” apologized to his victims and expressed deep regret and sorrow. However, (as I am sure many of you have read) “Madeoff” has a blog where he talks about everything. He mostly brags about his possessions and has even ridiculed his victims. There is also a link on his blog that then takes you to another one of his websites. Anybody who reads the “about us” page will be completely disgusted by some of his remarks. He even mentioned that one of his kids or grandkids should purchase a condo in Florida from the estate sale of one his “greedy clients” who dropped dead of a heart attack after finding out he and his family had been completely wiped out by “Madeoff”. If you ask me, Bernie, is the greedy pig.
Madoff even goes on to explain how he forged monthly statements and how no one ever really looked at their statements close enough. According to “Madeoff”, his customers could have checked the daily transaction volumes and compared them to actual historical data. He would claim to have purchased 100,000 options for a particular stock on a certain date. The closing price of the stock that was reported was always correct, however, if the investor would have looked closer they would have noticed that the amount of options being traded that day did not add up with what “Madeoff” was reporting.
The bottom line is people trusted this guy without doing any real investigation into what he was doing. His strategies were supposed to be proprietary and he was therefore very secretive with his clients. He was even bold enough to claim that the people who asked to many questions were the ones that he turned away from his “fund”. He figured that these were the ones that would figure him out.
Swindled investors now want to hold the SEC responsible for not having acted on tips the Madoff was running a Ponzi scheme. They are correct to a certain extent. The SEC is somewhat to blame for not having uncovered this scheme years ago. However, as investors they should have done their due diligence and completely investigated “Madeoff” before giving him any money. The other thing that I find hard to understand is why so many of these people gave “Madeoff” the bulk of their net worth to manage. The number one rule too investing is to never keep all your eggs in one basket. These people gave all their money to one individual without even understanding how he made a 10% profit every year. Furthermore, many of these investors were considered to be sophisticated investors. Fund managers (who basically just gave some else’s money to someone else to manage) were duped and lost billions.
The week ended on a positive note this week on Wall Street. The DJIA and S&P averages were positive for the last four trading sessions this past week. Perhaps, investors feel safer now that Bernie “Madeoff” is in jail. The quick sentencing should send a message to others that are running investment scams that they will be caught and brought to justice.
On Thursday March 12, 2009 disgraced financier Bernard L. Madoff reported to jail to serve time for what has been called the largest Ponzi scheme ever uncovered. Crowds of people stood outside, many of them victims, wanting to get a chance to see justice served. “Madeoff” pleaded guilty before the Judge Denny Chin and was hauled off to what many say will be the rest of his life behind bars. “Madeoff” apologized to his victims and expressed deep regret and sorrow. However, (as I am sure many of you have read) “Madeoff” has a blog where he talks about everything. He mostly brags about his possessions and has even ridiculed his victims. There is also a link on his blog that then takes you to another one of his websites. Anybody who reads the “about us” page will be completely disgusted by some of his remarks. He even mentioned that one of his kids or grandkids should purchase a condo in Florida from the estate sale of one his “greedy clients” who dropped dead of a heart attack after finding out he and his family had been completely wiped out by “Madeoff”. If you ask me, Bernie, is the greedy pig.
Madoff even goes on to explain how he forged monthly statements and how no one ever really looked at their statements close enough. According to “Madeoff”, his customers could have checked the daily transaction volumes and compared them to actual historical data. He would claim to have purchased 100,000 options for a particular stock on a certain date. The closing price of the stock that was reported was always correct, however, if the investor would have looked closer they would have noticed that the amount of options being traded that day did not add up with what “Madeoff” was reporting.
The bottom line is people trusted this guy without doing any real investigation into what he was doing. His strategies were supposed to be proprietary and he was therefore very secretive with his clients. He was even bold enough to claim that the people who asked to many questions were the ones that he turned away from his “fund”. He figured that these were the ones that would figure him out.
Swindled investors now want to hold the SEC responsible for not having acted on tips the Madoff was running a Ponzi scheme. They are correct to a certain extent. The SEC is somewhat to blame for not having uncovered this scheme years ago. However, as investors they should have done their due diligence and completely investigated “Madeoff” before giving him any money. The other thing that I find hard to understand is why so many of these people gave “Madeoff” the bulk of their net worth to manage. The number one rule too investing is to never keep all your eggs in one basket. These people gave all their money to one individual without even understanding how he made a 10% profit every year. Furthermore, many of these investors were considered to be sophisticated investors. Fund managers (who basically just gave some else’s money to someone else to manage) were duped and lost billions.
The week ended on a positive note this week on Wall Street. The DJIA and S&P averages were positive for the last four trading sessions this past week. Perhaps, investors feel safer now that Bernie “Madeoff” is in jail. The quick sentencing should send a message to others that are running investment scams that they will be caught and brought to justice.
Labels: Bernad Madeoff, Bernard L. Madoff, DJIA, madoff investors, Securities and Exchange Commission
Credit Card / Financial news blog post by Todd Holliday at 6:51 PM 