Dec 14th, 2008 at 8:34 pm
Irony Department
I guess they haven’t taken the Madoff Securities website down yet:
The Owner’s Name is on the Door
In an era of faceless organizations owned by other equally faceless organizations, Bernard L. Madoff Investment Securities LLC harks back to an earlier era in the financial world: The owner’s name is on the door. Clients know that Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm’s hallmark.
And, indeed, Madoff did appear to have been harkening back to an earlier era of scams.
26 Responses to “Irony Department”
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December 14th, 2008 at 9:23 pm
This refers to what is the core business which is ‘market making’ and ‘clearing’ of stock trades.
The fraudulent part involved money management.
December 14th, 2008 at 9:29 pm
I guess it can be called a zombie website. Killing it will require non-payment of their yearly registration fee.
December 14th, 2008 at 10:35 pm
I’m not the biggest fan of Caruso from CNBC but she put it best “…the individuals that invested with Maddoff should have known better!” or at the very least they should have paid someone to know better.
His scheme relied on investors greed and willing ignorance more than elaborate trickery. Kinda like Petters from Minnesota.
Ask questions, then ask more…that’s my motto.
k1
ryanculver.blogspot.cm
December 14th, 2008 at 10:53 pm
This is awful for those who invested personally with Madden.
But I hope it’s not lost that a lot of the money invested with Madden came from fund managers, managers of hedge funds or even from funds of funds. These are supposed to be sophisticated financial people, worthy of the grotesque salaries and bonuses they pull down. And the value/work they offer in return? They turn the money over to someone else to actually make the ultimate investments. And don’t even do due diligence on that someone. But you know they are worthy of these salaries, they earn them by the value they cvreate, because you know the blessed sainted market determines their compensation.
December 15th, 2008 at 12:15 am
@ Gene – Your point is well-taken. I can make a bone-headed move like on my own without having to pay commission. What I can’t understand is how people let him manage the funds without staff, or were there others complicit, as well?
December 15th, 2008 at 12:33 am
Matt:
more proof that at the end of the day, many of these so called “brilliant” people (CEO’s, business leaders etc…) are not really “brilliant”. Rather; and this is anecdotal evidence if I ever saw it; these are people who have benefited from and relied on personal relationships, networking and in general, the fact that we humans, for what is it worth, rely more on personal interactions and “gut” feelings to make decisions, even important decisions such as where to park a million or more dollars. I mean, why would they ever, ever inquire about the accounting firm performing the annual audits, even after a Barron’s 2004 expose. Why would they when just the other week, they met Madoff at the annual charity event at the Club, and he is just such a darned swell guy.
Sadly, I feel that even after we somehow (maybe decades from now) pull through this mess that all of these “brilliant” people got us into in the first place, we will not learn our lesson.
December 15th, 2008 at 1:34 am
I can’t get over the recklessness of Maddoff’s smarter clients. Many of his customers were individuals that jumped off the cliff on word of mouth, but there were plenty of clients that understood he had to be crooked to achieve his consistent returns but they thought it was insider trading. This was a very rational interpretation because Maddoff was good at avoiding traditional pyramid scheme flags (he didn’t pay ridiculous returns, he sustained his investment business for decades and he made it appear that he was very reluctant to accept new business while also capping the amount a new investor could put in for the first year or two).
And so we had a bunch of folks who knew the guy had to be dirty but they thought it was the common folks and investors getting screwed and they were happy to benefit from illegal trading at other people’s expense. I can only imagine the shock and regret these rich pricks experienced from thinking they were in on the con to realizing they were the marks. Reminds me of a much less famous line in Wall Street where Martin Sheen explains to his son why he won’t do business with Gordon Gekko: “I don’t go to bed with no whore and I don’t wake up with no whore, that’s how I live with myself; I don’t know how you do it.”
December 15th, 2008 at 3:50 am
The name on the door now says ‘madeoff’
December 15th, 2008 at 9:31 am
JeffB: “What I can’t understand is how people let him manage the funds without staff, or were there others complicit, as well?”
They are still investigating that (including his sons).
“People familiar with the firm say Madoff employed 200, with 20 or so in the asset management group that was housed in a separate floor from the trading group.”
“Investigators also are trying to determine whether there was any involvement by Mr. Madoff’s sons, who held high-level positions at the firm, according to people familiar with the inquiry.
In a statement Friday, a lawyer representing Mr. Madoff’s sons, Mark and Andrew Madoff, said the brothers “are not involved in the firm’s asset management business, and neither had any knowledge of the fraud before their father informed them of it on Wednesday.”
The brothers “were among the many victims of this scheme and will continue to cooperate fully with the U.S. attorney and the SEC in their investigations,” the statement said.”
http://online.wsj.com/article/SB122912905415403347.html
It seems absurd to me that a man would keep
his own sons completely out of the more prestigious asset management business and keep them totally managing the more comparatively more mundane market making business.
Unless he planned decades ago to keep his
sons clean (or at least clean enough for plausible deniability). It still seems ridiculous that his sons would be so far down in the company that they couldn’t figure out 10’s of billions of assets were missing.
One thing is for sure, Madoff did not steal 10s of billions over years and years completely alone. That seems impossible to me. *Some* ex or current employees or associates have to have known and even actively helped. I am not saying all 200 employees are guilty, the majority are surely innocent, but the SEC will have failed spectacularly again (and pretty much deliberately) if everyone but Madoff Sr. gets off the hook.
Another fun fact: “If you did get invited in, then you were anointed a member of this particular club of “sophisticated investors.” Once someone you respect went out of his way to grant you access, says Prof. Cialdini, it would seem almost an “insult” to do any further investigation. Mr. Madoff also was known to throw investors out of his funds for asking too many questions, so no one wanted to rock the boat.”
http://online.wsj.com/article/SB122912266389002855.html
December 15th, 2008 at 12:59 pm
Yes they have. http://www.madoff.com now reads:
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