December 22. 2008

Bernard Madoff

The fall out from Bernard Madoff’s madness is not pretty. The Picower Foundation that had assets of a billion dollars and regularly gave to numerous charities and universities such as Harvard and MIT, has announced its closure thanks to losing all their money with Madoff.

At worst you can put money in a CD and get a 4%-5% return on your investment. Even a layperson could have safely gotten 4%-5% just by letting the money sit in the bank. Therefore, what kind of supremely risky investments was Madoff making? Why didn’t he diversify and place some of the funds in safer investments?

Why was there no real insurance to better protect investors, as what the government is offering is peanuts? I know when one invests one takes a risk, but that risk should not mean losing every dime. Why was there no oversight legally compelling someone managing that large a sum to show authentic, accurate and current financial documentation of the figures he was claiming he controlled and the so-called high yields.

What was Madoff doing with people’s money that he went so far in the red, to the point he blew through that much capital - $50 billion. There’s reportedly only $300-$500 million left. Once they liquidate his assets, they may gain another $50 million. $550 million in restitution when $50 billion was lost is pure rubbish.

I blame the government for Madoff’s conduct becoming the massive nightmare it has turned into at so many people’s expense. The public invested in good faith. There should have been safeguards to protect such a terrible scenario from unfolding.

Once again, the government received complaints for years and ignored them, because Madoff was rich and influential. They could have stopped this guy at $1 billion in losses, but sat back thinking the problem was going to correct itself and was someone else’s problem, when they are legally empowered to investigate and halt such misconduct.

Problems don’t solve themselves. To a mind like Madoff, that type of leeway from the government was interpreted as a license to go even further and that he did, until he racked up $50 billion in losses.

Looking at the photos of him smirking for the cameras last week after he was arrested, lent the impression he is sadistic or criminally insane. The average person would not smirk under such circumstances, as the charges and damages are very serious.

What I wrote on the site on Friday, December 19, 2008 has been confirmed, “The sad part is, there are more Bernard Madoffs out there.” The New York Daily News got the FBI to state on the record there is, "More market fraud yet to surface after Madoff scam." Thanks for biting my article New York Daily News (sarcasm):

STORY SOURCE

Feds: More market fraud yet to surface after Madoff scam

Sunday, December 21st 2008, 7:52 PM - Bernie Madoff's alleged $50 billion scam may be one of the worst scandals ever to hit Wall Street, but it's not likely to be the last white-collar caper of the decade. Law enforcement officials predict that the next two years will be banner ones for the exposure of financial fraud.

"This is probably the biggest surge in financial crime maybe since the savings and loan crisis of the 1980s," said David Cardona, head of the criminal division in the FBI's New York office, where most of the bureau's Wall Street probes start...

http://www.nydailynews.com

Foundation to Shut Down, Says Madoff Managed Money

One of the nation's leading educational philanthropies announced that it would close in the coming months, brought down by the alleged financial fraud orchestrated by Bernard Madoff.

Barbara Picower, who along with her husband, Jeffry, established the Picower Foundation in 1989, said in a statement on Friday that the foundation's grant-making would cease "effective immediately" and that it would "close its doors in the coming months."...

http://abcnews.go.com