Madoff Had Accomplices: His Victims

[Mass]

Worth reading...

http://www.nytimes.com/2009/03/14/business/14nocera.htm...

Standing in the security line Thursday morning, waiting to get into the federal courthouse in Manhattan, I started chatting with the man behind me. He looked to be in his early 60s, and though he was well dressed, he looked a little haggard. I asked him if he was a victim of Bernard L. Madoff, who would soon be pleading guilty to masterminding the greatest Ponzi scheme in history. He said he was.
...
At a panel a month ago, put together by Portfolio magazine, Mr. Wiesel expressed, better than I’ve ever heard it, why people gave Mr. Madoff their money. “I remember that it was a myth that he created around him,” Mr. Wiesel said, “that everything was so special, so unique, that it had to be secret. It was like a mystical mythology that nobody could understand.” Mr. Wiesel added: “He gave the impression that maybe 100 people belonged to the club. Now we know thousands of them were cheated by him.”
...
And yet, just about anybody who actually took the time to kick the tires of Mr. Madoff’s operation tended to run in the other direction. James R. Hedges IV, who runs an advisory firm called LJH Global Investments, says that in 1997 he spent two hours asking Mr. Madoff basic questions about his operation. “The explanation of his strategy, the consistency of his returns, the way he withheld information — it was a very clear set of warning signs,” said Mr. Hedges. When you look at the list of Madoff victims, it contains a lot of high-profile names — but almost no serious institutional investors or endowments. They insist on knowing the kind of information Mr. Madoff refused to supply.
...
And that’s the point. People did abdicate responsibility — and now, rather than face that fact, many of them are blaming the government for not, in effect, saving them from themselves. Indeed, what you discover when you talk to victims is that they harbor an anger toward the S.E.C. that is as deep or deeper than the anger they feel toward Mr. Madoff. There is a powerful sense that because the agency was asleep at the switch, they have been doubly victimized. And they want the government to do something about it.
...

[merh]

1. WTF, blame the victims?

I guess they wouldn't be where they are if they didn't dress the way they did, if they didn't play golf or drive the cars or have the friends.

The article suxs - the writer better hope that there is nothing legit about the concept of karma.

[BeyondGeography]

2. If it was all obviously bullshit, why didn't the NYT expose it a long time ago?

[closeupready]

3. I'm not interested in blaming any of his victims.

I'm interested in blaming Madoff, his partners in crime, the SEC and the culture of greed that has so corrupted our society to such an extent that the New York Times publishes a viewpoint which is titled so as to characterize the victims of the largest Ponzi schemes in history as 'accomplices'.

Then again, maybe they were dressed provocatively.

[alcibiades_mystery]

4. Anyone who thought they were getting 10% in a down market

and hadn't carefully reviewed the processes by which this was happening is an imbecile, or a greedy fucking pig. I count the charities in this assessment. We hate to say it, but most fraud victims fall prey to their own greed. Not all, but most. In the case of Madoff, the greed factor is even obvious. Anyone who asked for details was rebuffed. There may be a small exception for people who had their investments funneled into Madoff through a feeder fund, but the questions should have been asked even there.

The guy wasn't knocking people over the head on the subway, for chrissakes. He created a mystique of exclusivity and let the greed of his so-called victims do the rest. These people absolutely share responsibility for their current situation.

I've been poor. I can tell you this with certainty: 1) in no situation would I turn over my life savings to anyone unless I knew damn well what they were doing with it, and 2) in no situation would I turn over *all* my money to ONE person or organization.

These are common sense points that poor folks know damn well, but they get lost when the magical vision of 10% returns flashes its seductive smile at you. The Madoff "victims" need to OWN their responsibility in being fucking duped behind their greed.

[acmavm]

5. It's funny. I read a long, long, long article on this scheme and how

it worked. Old Bernie never asked anyone for anything. They all begged him to take their money.

Some people were greedy asses. You may not like to think that but always remember "if it sounds too good to be true, than it probably isn't".

[alcibiades_mystery]

6. I think you replied to the wrong poster

"some people were greedy asses."

Change some to ALL and you've got it about right.

[acmavm]

8. Yeah, I did.

Been that kind of morning.

And yes, they were greedy. But don't say that too loud or you'll be seeing the old 'blame the victim' meme (damn I hate that word) all over the place.

[CTyankee]

9. When you read about the tulip bubble in holland in the 1600s you realize

how people can dupe themselves into believing something that is just not so When I read that story I could barely believe it. Investments in tulips!!

I do, however, feel sorry for Eli Wiesel. His foundation has done good work. He probably left money matters to the finance manager of his foundation so he could devote himself to his life's work. But, of course, how many times have we read about finance people embezzling or otherwise cheating their organizations? It's just too much of a temptation, I guess...

[Medusa]

10. I do have to wonder about people who put all their money

in one investment with Madoff. I don't care how good the return I'm getting, there is no way I'd ever put all my money in one place. Ever. So yes, I do think greed played an important role in so many of these people being completely wiped out. They wanted the highest return they could get, that's human and that's understandable but it is not sane or wise or prudent to put it all in one place.

[ogneopasno]

11. Well said. You are right on, and I totally agree.

[high density]

7. People will shop around to get a better value on airfare or a car

But when it comes to financial decisions that involve tens of thousands of dollars (or more), people are very trustworthy with "financial advisers" and other salespeople without doing much of their own research. Many of these people went to Madoff and didn't ask any questions. They thought they were getting a special deal in a high society club. Others got duped by a third party that failed to do its own research into Madoff's fund. It's outrageous that the SEC didn't uncover this scam sooner, but it's also crazy that people would put their life savings into an unexplained black box.

Investors blaming the S.E.C. for their decision to give every last penny to Bernie Madoff is like a child blaming his mother for letting him start a fight while she wasn’t looking.

[Fire1]

12. I feel for the charities and the elderly investors. I don't think

they had a clue. Ezra Merkin had the confidence of these charities and was even the president of one of them. They thought Merkin was doing the actual transactions (investing) and had no idea he was the middle man. I think elderly investors did so on pure faith and confidence and will never recoup their losses.