Wanna see how flawed/retarded our system is?

[Surfer]

Madoff was just arrested, former NASDAQ chairman and one who helped found it. Ponzi scheme that may show 50B in losses. Some large charities and non-profit groups were vested with him, funds of funds (imagine a lovely trickle down to other fund mngt companies who now just lost a boat load of money), and some very wealthy and prominent families that may have just lost majority or all of their family fortunes.

To quote Carlos Mencia, our country is a bunch of Dee Dee Dee's

edit: go to this link http://www.nytimes.com/2008/12/12/business/12scheme.html?em

 

[wytstang]

I applaud his sons for turning him in because they knew it was dead wrong.

 

[Surfer]

I just realized I had the wrong link, try that one.

 

[Pyrocite]

Remember that stealing anything below 50mil will get you minimum security prison time with possible room upgrades (seen it on Manswersfew days ago...). I wonder what you get for stealing 50 billions tho...

 

[Surfer]

I'm suprised at the few comments, this is massive news. This was one of the founders of the NASDAQ and former chairman. If he did this, imagine how many others are. This was completely difference from a company collapsing in this range like Enron (which was cooked books), this was a ponzi scheme where he would take investor money and pay his other investors and keep bringing investors on to do so. Here's a quote from him about 10 years ago basically calling our system a joke:

"There’s no focus on earnings at all. “It’s not investing anymore. It’s a casino,” says Madoff, conceding that “the regulators don’t like to hear that.”

 

[Gary Sword]

Our country is so corrupt from our politicians to CEO's it's no wonder we are in such bad shape. There's a lot of people getting rich off taxpayers and shareholder's money. It really makes me sick.

 

[67Customs]

Our country is so corrupt from our politicians to CEO's it's no wonder we are in such bad shape. There's a lot of people getting rich off taxpayers and shareholder's money. It really makes me sick.

I agree completely. It is extremely sad. All we keep doing is putting band-aids on and keep limping along. Been doing it for years.

Letting a lot of power sit in so few human hands is always going to turn out for the worst.

 

[Surfer]

And so it starts, here's one charity that already folded:
Lappin Foundation folds abruptly - SalemNews.com, Salem, MA


And here's a lady they interviewed:
A 68-year-old New York woman, who declined to be identified, said she and her 73- year-old husband invested about $12 million with Madoff. Her husband’s former law partner had met him at a country club on Long Island, she said.

Madoff bought and sold stocks frequently, she said, as reflected in trading-account statements running over six pages. Although she said she has four residences, including one on Manhattan’s Upper East Side, she fears the couple’s entire savings are gone except for $60,000 in a bank account.


This is nothing yet, will be a massive ripple effect.

 

[r_wain]

The man was a genius...an evil not so smart genius...but a genius nonetheless. Should have shut it down when he hit it big after the internet bubble...that is the problem with criminal they get to greedy. Sounds like he had a life's over moment when he talked about spending around what was left to his employees. I'm not gonna say he was right but given the chance honestly I would have done it too. Came from nothing, made it big(illegally), now back to nothing, cycle of life.

 

[ScottB]

where was the SEC during this and the auditing necessary for hedge funds and their managers ?? Our system is just as much the culprit for allowing this to happen for so many years without issue.

 

[img]

r wain,

Your basically saying that his real problem was that he got caught.
That's what's wrong with our country today--greed(and the lying,
cheating and deception that it engenders).

He only had approx 11 investors (their greed helped to fuel the fire), and
I have no sympathy for them.

To top it off, at they end, he gave $300 million to a few people he
said were "trusted" employees--guess he wants them to stuff it
in their mouths so they can't talk.

Lastly, in typical fashion, his lawyer says he is a "man of integrity"--figures.

Happy polishing!

 

[Surfer]

where was the SEC during this and the auditing necessary for hedge funds and their managers ?? Our system is just as much the culprit for allowing this to happen for so many years without issue.

So funny you said that, watching them talk about it on tv, they all said the same thing...get rid of the SEC as their worthless now. And it was found out the SEC years ago investigated complaints that were true and nothing happened. They said the same thing I thought, the whole system needs a restructure, until that happens, we're screwed.

And his friggen attorney LMAO, goes on about how he's a man of integrity, well respected etc. Well yeh, until he was caught. Heck he even admitted to running a ponzi scheme no problem. God I hate most lawyers lol. They had some others on that lost, NY Mets owners had a large chunk with him. Another wealthy (or was) family who wanted to remain nameless said almost all their wealth is gone (aprx 100m).

These guys do it for the thrill, don't care who they hurt or what happens. I mean he was quoted over 10 years ago calling the system a joke and that its not investing anymore, but a casino. Some were comparing it to Enron as the final numbers could be pretty much similar to the losses, difference is Enron had cooked books, Madoff was running a straight Ponzi scheme. And you know their feeder funds had something to do with it, there is no way they went all these years not knowing whats going on.

Whats scary is were talking about the former chairmain and one of the founders of the NASDAQ. Madoff was celebrated and respected by everyone for decades as "the man". If someone in his position and stature did this, just imagine what else is going on with other places.

Scott - you may remember this. Remember No Mercy/Mana (Bill)? Viper guy, but also was on the Vette boards in the past, had lambos etc. He was doing the same thing. All these years well respected on teh auto forums and by members in real life, until the house of cards came tumbling down. He was running an investment company and doing the same thing, Ponzi Scheme. Est 20-50M he took from people, friends, forum members. When it all came crashing, poof disappeared, nobody knows where his wife, kids, and himself are.

 

[Streetlife]

I couldn't agree with you more Killrwheels. My economics professor, that i had for micro and macro economics, made the same statement about the market back in 2006, it's no different than Vegas. The man was definitely right.

 

[r_wain]

r wain,

Your basically saying that his real problem was that he got caught.
That's what's wrong with our country today--greed(and the lying,
cheating and deception that it engenders).

I was just saying that given the opportunity I, more than likely, would of done the same thing...and now saying he is wrong and should be punished severely would be hypocritical. I really hate people chastising others for stuff they would do themselves. I know what he did was wrong and he will do his time.

 

[Eruptiv]

C.R.E.A.M.(cash rules everythng around me)This is so true.People get greedy and can't see what they are doing is morally wrong.It WILL catch up with them.God's judgment may be slow ,but it is definite.

 

[jfsully]

Each hedge fund of funds counted as one client so the numbers are actually much larger.

There are major charites in Palm Beach County and around the country that will be folding as well as many people who lost large and small amouts. I know of one person who lives in a 20 million dollar house who has less than $20,000 left to his name.

This is that deep semi regulated underworld of hedgefunds...in this case there was no separate custodian, no real audit, no regulatory oversight to speak of because of the number of clients until recently: WSJ:

:“Money managers can evade federal oversight if they have fewer than 15 clients. The question for years has been how to define a client. Many managers count one hedge fund as one client, even if that hedge fund is gathering money from many investors. In 2005 the SEC attempted to count all the investors as separate clients, but a federal appeals court threw out the rule in 2006 and the SEC never took it up again”.


This situation was investigated in 1992 and 2001 with no action against the firm.


FROM 1992 investigation and WSJ coverage : Wall Street Mystery Features a Big Board Rival - WSJ.com

May 2001 Barrons : Don't Ask, Don't Tell
Wall Street Manna: The original "Don't ask, don't tell" Madoff story

Madoff tops charts; skeptics ask how (2001)
http://nakedshorts.typepad.com/files/mad...

Its amazing how long it lasted and the extent.....disclosure, diversification and transparency would have helped all these investors.

 

[Surfer]

Each hedge fund of funds counted as one client so the numbers are actually much larger.

There are major charites in Palm Beach County and around the country that will be folding as well as many people who lost large and small amouts. I know of one person who lives in a 20 million dollar house who has less than $20,000 left to his name.

This is that deep semi regulated underworld of hedgefunds...in this case there was no separate custodian, no real audit, no regulatory oversight to speak of because of the number of clients until recently: WSJ:

:“Money managers can evade federal oversight if they have fewer than 15 clients. The question for years has been how to define a client. Many managers count one hedge fund as one client, even if that hedge fund is gathering money from many investors. In 2005 the SEC attempted to count all the investors as separate clients, but a federal appeals court threw out the rule in 2006 and the SEC never took it up again”.


This situation was investigated in 1992 and 2001 with no action against the firm.


FROM 1992 investigation and WSJ coverage : Wall Street Mystery Features a Big Board Rival - WSJ.com

May 2001 Barrons : Don't Ask, Don't Tell
Wall Street Manna: The original "Don't ask, don't tell" Madoff story

Madoff tops charts; skeptics ask how (2001)
http://nakedshorts.typepad.com/files/mad...

Its amazing how long it lasted and the extent.....disclosure, diversification and transparency would have helped all these investors.

Was that person in Miami? I spoke to a friend down there who knew some very wealthy people down there, and a few of them are basically totally broke now....lost everything with this. The charities are already folding. This will be huge, I know many don't understand how these funds work, this is going to be widespread. Already has exposure in Europe whose banking system is as fragile as ours right now:
WRAPUP 1-Three European banks announce exposure to Madoff | Industries | Financial Services & Real Estate | Reuters

 

[jfsully]

I understand hedgies very well...its why I avoided them. As the public understands one game on Wall Street, Wall Street invents a new one. The whole Hedge fund thing is a joke and always has been.

The stories I'm getting are from the upper east coast. People who were with him for 15 plus years. I also live in the Intracoastal across from Madoff's house so am hearing a lot of stories from around here and the upper east coast area.

IMO, the only real ramification is the damage of trust AND the possible total unraveling of the Hedgies and the liquidations. Most are dying over the last several months anyway and that has contributed to the market downturn.

The reality is this scandal will hopefully cause the entire hedgie world to unravel. It may be the last stake in their hearts.

I love Mad(e)offs statement a few years ago " says he made up for the cost of the hedges -- which could have caused him to trail the stock market's returns -- with stock-picking and market timing"

Market timing is bull and stock picking is bull, especially after fees. Ask Benjamin Graham before he died:" I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook "Graham and Dodd" was first published; but the situation has changed a great deal since then. In the old days any well-trained security analyst could do a good professional job of selecting undervalued issues through detailed studies; but in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. To that very limited extent I'm on the side of the "efficient market" school of thought now generally accepted by the professors."

 

[supercharged]

captain of this system almost hit hit with a shoe. I guess someone just could not stand him anymore. Too bad he dodged it...

 

[img]

Still got good reflexes! Don't get so excited--you still have to wait until
January 20 until the first handout checks are mailed.

Heard the most astute analysis of this scam on tv this morning--
"There is no substitute for ethics" (except morals perhaps).