Why is this man crying?
Posted: December 12th, 2008 | Author: Wayne Weddington | Filed under: Opinion | Tags: Bernard Madoff, crime, hedge funds |
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Bernard Made-Off. With $50 billion.
I have been a little surprised at the lack of coverage on Madoff’s devastating crime of fraud. The ripples from his crime will reach tsunami proportions for investors around the country and particularly in the towns of Long Island and Palm Beach.
I cannot not imagine how someone like Madoff can sleep at night. It was a scheme carried out with profound efficiency, hype and arrogance. Madoff even had a two-year waiting list to get exposure to his supposed performance. He created a ruse of scarcity value when all the while he probably “let” investors into the fund only to pay off mounting redemptions. Because of the relative “safety” of Madoff’s returns, there were many families who parked their entire life savings with the firm.
I am deeply suspicious of the rest of the family’s participation. It seems implausible that they could not have known or were not complicit. (This is a blog so I can make opinionated statements.) I have been told that Bernard’s brother, Peter, had the temerity to “show up at temple” this past Saturday, only two days after Bernard was arrested. As there were no incidents at the temple I can only applaud the restraint of his fellow congregants, many of whom, I understand, were clients. Perhaps at least one congregant might have thrown his or her shoes at Peter, as was infamously done to W this weekend in Baghdad.
Of my own experience, clients sometimes chafe at the rigor with which my Administrator scrubs a subscription for proper notary signatures, passports, character references and other identifying data. “I have invested in 20 hedge funds and no one else has asked me for this information,” they complain. But in the world of private funds, rigor, while it is cumbersome and tedious, is your best friend. I suspect that the SEC will also be found to have been negligent for not pursuing oversight of Madoff more strenuously.
-Wayne Weddington