WIZARD OF LIES

No, it is not Michael.

The inside story of Bernie Madoff and his $65 billion Ponzi scheme, with surprising and shocking new details from Madoff himself.

Who is Bernie Madoff, and how did he pull off the biggest Ponzi scheme in history?

These questions have fascinated people ever since the news broke about the respected New York financier who swindled his friends, relatives, and other investors out of $65 billion through a fraud that lasted for decades. Many have speculated about what might have happened or what must have happened, but no reporter has been able to get the full story--until now.

In The Wizard of Lies, Diana B. Henriques of The New York Times--who has led the paper's coverage of the Madoff scandal since the day the story broke--has written the definitive book on the man and his scheme, drawing on unprecedented access and more than one hundred interviews with people at all levels and on all sides of the crime, including Madoff's first interviews for publication since his arrest. Henriques also provides vivid details from the various lawsuits, government investigations, and court filings that will explode the myths that have come to surround the story.

A true-life financial thriller, The Wizard of Lies contrasts Madoff's remarkable rise on Wall Street, where he became one of the country’s most trusted and respected traders, with dramatic scenes from his accelerating slide toward self-destruction. It is also the most complete account of the heartbreaking personal disasters and landmark legal battles triggered by Madoff’s downfall--the suicides, business failures, fractured families, shuttered charities--and the clear lessons this timeless scandal offers to Washington, Wall Street, and Main Street.

I saw the author on a talk show. She said Bernie always told himself that if things went bad, he could fix it and make everybody happy. He went into denial when it got out of control, and still told himself he could fix it. Its a typical criminal mindset, most of them think they have good reasons for doing what they do. Like all the people who embezzle and blow it on slots. They keep telling themselves that as soon as they get ahead, they pay the money back.

What bothers me the most is the lack of regulation that let him get away with that. Not to mention the same lack of regulation that led to the housing bubble and burst.

I don't think its lack of regulation but more lack of effective regulation.

In Enron, there were people who had doubts long before it all hit the fan.

Even with private hedge funds where everyone is a sophisticated investor there are still people who are lazy and people who are greedy. Some people knew that stellar records year after year was just too many spins coming up on red for the wheel to be unbiased.

In Iceland, the banking collapse brought down the government and sent people's mortgage payments up 300 percent overnight. Its a small country with everyone in business linked by relatives. There were no watchdogs.

There is an old saying: You can't cheat an honest man. Its not entirely true. You can, its just easier to cheat a dishonest one. Stepping knowingly into a Ponzi scheme is fine... for those who think the gravy train will continue forever.

I wonder if Bernie is playing the 'if only' game in prison. Reliving his life and saying, if only..

Only thing he is sorry for is getting caught. In last weeks as fraud unraveled his main concern was getting millions to pay as bonuses for the boys who steered a steady stream of suckers to Bernie.

I have run equity portfolio's for 14 years and own a Registered Investment Advisory. Regulators have been more concerned with things like front-running than they have been fraud/custody issues. While I think front-running and Insider trading are unethical and justifiably illegal both are arguably victimless crimes in the fact that neither fleece the general public or constitute fraud. What is truly amazing is the fact that a money manager could get prosecuted and jailed for trading on inside information while at the same time a member of congress/senate would not be held to the same legal standard if he bought/owned stock in a company that he knew would get a defense contract , favorable legislation. etc...

SEC audits of money managers often consist of them going through personal trading records and client trading records looking for instances where the manager may have purchased /sold shares prior to purchases/sales for clients. This lasts for days as you are required ti keep 3 years worth of hardcopy on site and electronic records indefinitely. At the same time the SEC was auditing a friend of mine for a month they were ignoring credible evidence and complaints against the likes of Madoff and Allen Standford.

Madoff was not a fee based money manager and was not governed by the SEC he was supposedly paid off of the commissions charged on his trades. He also owned a broker dealer and market making trading firm. This was all on FINRA's (formerly NASD) watch. By the way he was actually a past board member for FINRA as they are a Self Regulating Organization financed by member firms.

Quote: FleaStiff

There is an old saying: You can't cheat an honest man. Its not entirely true. You can, its just easier to cheat a dishonest one. Stepping knowingly into a Ponzi scheme is fine... for those who think the gravy train will continue forever.

You can't cheat an honest man if your scheme involves getting him involved into something shady. In the case of Madoff, I have more sympathy. Sure, investors were being lazy, but there was no reason to think they knew they were cheating others to profit themselves. I can see just about anyone getting burned. If you wanted to be critical, these folks were indeed violating some basic rules of investing: putting their eggs all in one basket [not clear to some of course], not demanding an accounting of the source of returns [we all learned from that], investing into something they didnt understand [for many a distinction without a difference from other investments]. I actually don't think I could fall into a mistake like this now, but I think I could have before all this.

It's pretty powerful to have someone you trust tell you "this is the way to do it" when it comes to just about anything you feel you need help on .

Quote: Scotty71

I think front-running and Insider trading are unethical and justifiably illegal both are arguably victimless crimes in the fact that neither fleece the general public or constitute fraud.

As someone who has been affected by both of those, I have to say you had not better believe that those are victimless. Just not maybe to the same extent as an outright $50 billion lie.