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As investigators continue to look into the $50 billion Ponzi scheme that investor Bernard Madoff was running, what's interesting to note that Madoff's dealings affected the super-wealthy to the just plain-old mom-and-pop savers. Madoff (pictured, with his Park Avenue apartment building at right) was arrested after he admitted to employees (including his sons) that his successful investment firm was a "big lie" that he had used investments from clients to pay returns to earlier clients.
The NY Times reports that Mets owner and real estate investor Fred Wilpon, through his firm, "entrusted Madoff with hundreds of millions of dollars to invest... Although it is unclear how much money Wilpon may recoup, any significant financial loss by a team owner raises questions about how those losses may affect the franchise."
On the other hand, there's retired carpet salesman Arnold Sinkin, who, with his wife Joan, saved their money and had invested with Madoff. The couple, in their 70s, told the Daily News they lost 85% of their life savings; Joan Sinkin said, "Nobody in our lives gave us anything. We worked hard for every penny that we had." Another victim, Joyce Greenberg, told the Post that she received official-looking statements from Madoff detailing stock transactions, "The point with him was that I always got every document. If you get all the documents, you are not suspicious."
Clusterstock has a list of victims mentioned so far—there's the big hedge fund that had $7.3 billion with Madoff, Banco Santander (3 billion Euros worth of exposure), and then families who had hundreds of thousands with Madoff. Clusterstock's Henry Blodget has a piece in the Post noting key factors for why no one really questioned Madoff, including how he "never promised (or delivered) huge returns," his clients (thrilled with the returns they got) told their friends or associates to invest with him, and clients may have thought he was cheating with "front-running"—an illegal scam that does make money (versus it being a Ponzi scheme).
A lawyer who filed a class-action suit against Madoff told the Post, "It's overwhelming. We have been interviewing people from as far away as Argentina, London - of course, Palm Beach and the New York area - up and down the Eastern seaboard, and out West." And Bloomberg News reports that the SEC didn't investigate Madoff's firm "after he subjected it to oversight two years ago," (some suggest the SEC doesn't have the resources for this kind of investigation of a recently registered firm) and adds, "Any suspicions about Madoff may have been dampened because of his association with industry groups, watchdogs and politicians."
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Anyone who invested with him and thought that he was front-running got what they deserved. They thought they were profiting through cheating (without legal risk, which would really only be his), but got burned themselves.
this dude was the nasdaq chief!!!! This just goes to show you that Ibanks and investing is all just a big con. It's like billon dollar musical chairs.
"Springtime for Hitler and Germany..."
...or was it babyhitler?
Watch how many other hedge funds are gonna
blame Madoff & Co. jez u watch.
I'ts too easy and they need to cover up their
own questionable mistakes and openings due to non-regulation.
King Bloomie any comments on this theft? A lot
more serious than Plaxio's gunshot,Nah! these
are probably your friends and with friends like
these you don't need enemies.
Oy Vey!
.....ahhh, the Stock Market....where the big sharks eat the small fish....
...Saul Katz, co-owner of the Mets...Norman Braman, owner of the Philadelphia Eagles...Mort Zuckerman...Senator Frank Lautenberg...increasing chatter about Rush Limbaugh...
Rush is OK, he makes 20 million+ (a year?) I would
wish he were a loser though.
This should make him even more happy about
how things are done in liberal NU YourK.
Moishe how could you have done this to us? 50 large ones Moishe. I need a face lift and you blow it on some hedge fund? Moishe how could you? My mother's condo in Miami you mortgaged? My nails are cracking I'm so distressed. How could you do that Moishe? I'm calling Bernie.
At least we know how some people are able to live the luxury lifestyle.
Duh! Even in a total scam, every single one of those investors signed a form stating that they knew they could lose 100% of their investment. So please, don't complain if you were dumb enough to put "85% of your life savings" into a hedge fund.
Kids, we haven't seen the half of the impact of this yet.
And to those blaming the victims, this was a reputable firm with a client base built over decades. Typical ponzi schemes promise quick, high returns. Madoff ran a reasonable business over years. People slowly increased their holdings with him over time. He proved himself to be trustworthy. I feel terrible for those whose trust was so deeply betrayed.
This was not a hedge fund. Have any of the commenters herein bothered to read any of the news items about this?
how is this not a hedge fund?
people give him money to invest, rich people,
very rich people. isn't that a hedge fund.
it's a money club for the rich.
(that's what the lawyer said at opening)
I'm not sure what happened to the money other than he lost it. Did he embezzle the money? I mean, what was illegal here?
"Norman Braman, owner of the Philadelphia Eagles"
The owner of the iggles is Jeffrey Lurie.. for over 10 years now.
I see a government bailout brewing in the works for this one.
"What's interesting to note is that Madoff's dealings affected the super-wealthy to the just plain-old mom-and-pop savers."
That's what you call equal opportunity greed. What a bastard!
oh defrauded them by giving them false information. gotcha.