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Bernie Madoff and fifty billion dollars

By James F. Cotter

Bernie Madoff ran the largest Ponzi scheme in the land, perhaps thinking that it may perpetuate the fraud for the rest of his life. After all, had been going on for a very long time, and was Madoff - besides being rich - very respected and even held in affection by many people around the world. Pensions, charities and individuals were ripped off by his fraud, which seems to have stolen at least $ 50,000,000,000.

Named for Charles Ponzi, an Italian immigrant who came to America in 1903, Ponzi scheme - in fact has existed for centuries - used investors' money after paying previous investors, and investors are able to attract more intriguing the more you can pay the previous investors - and, of course, himself. When no more money can be raised, the scheme collapses. If money continues to come in, the scam could continue indefinitely. Ponzi became a millionaire in no time. He was deported, but not before he had jumped bail and fled to Florida, where he sold "Prime real estate", which turned out to be swampland. Even Emma Lazarus would have rejected with a frying pan as he got off the boat. After their expulsion, continued his scam until his death in 1949 in Rio de Janeiro (1).

As Madoff - an appropriate name, according to Keith Olbermann, in which the man made off with money from the people - he was somehow overlooked for years by the Securities and Exchange Commission. The president of the SEC, Christopher Cox said the SEC had received "credible and specific allegations about Mr. Madoff financial irregularities", but did not investigate aggressively.

"Over the decades," Alex Berenson and Diana B. Henriques concern in the New York Times, "Mr. Madoff expanded steadily his circle of investors, drawing in small individual investors, charities, pension funds, prominent billionaires and European banks. "Cox Madoff said that not only lying to regulators in previous reviews of your business, but also provided false documents and had several series of books (2). Markopolis Harry, a financial analyst, warned the SEC's Boston office in 1999 that the investigation of Madoff justified, since it was impossible legally to be making as much money as Madoff claimed to investment strategies that claimed to be using.

In 2005, Markopolis sent a 17-page memorandum to the SEC, "The World's Largest Hedge Fund is a fraud. "Madoff did well in first position, said Markopolis, or conducting a Ponzi scheme - probably the latter. Somehow, Madoff stayed in business.

In December 2008, Madoff recognized the senior executives of the firm management division was actually "a giant Ponzi scheme." Two of the executives - their children - told authorities he was arrested and Madoff (3).

Here are some steps simple to avoid being victims of a Ponzi scheme, most of them listed by Paul Sullivan in the New York Times (4) (actually it is investment rules wise to follow, or Ponzi Ponzi no):

Do not sink your life savings in any single investment. As Paul Sullivan, "The basic book on investment will tell you never put more than 5 or 10 percent of all investment in, including one designed to preserve wealth. "

Any investment that promises high returns consistently untrustworthy. "Good investment advisers back plan for moderate over the years," Sullivan notes. "They know that a year will be given a 11 percent next year to 6 percent, and a year after you lose 2 percent, to count to 5 percent. Mr. Madoff yields were too good to be true, but nobody wanted to believe. "

Do not invest with someone just because you enjoy playing golf with him, or because they are in the same geographical region, or went to the same school.

By God, do not be afraid or ashamed to ask questions. If there are more questions asked Bernie Madoff, which can not be inflicted as much damage as it did.

And the line 'Lectric Law Library warns: "You should pay special care where the emphasis is on an investment opportunity with a very high performance, quick return, a 'once in a lifetime opportunity, and the possibility of obtaining on the ground floor. " "(5)

Finally, and this is often overlooked: Vet your investment advisor. Do not automatically assume which is competent only because this is what it does for a living. A lot of investment advisors encouraged many people to invest with Ponzi - I mean, Madoff.

REFERENCES

1. En.wikipedia.org / wiki / Charles Ponzi _

2. Http: / / www.nytimes.com/2008/12/17/business/17madoff.html?_r=1

3. En.wikipedia.org / wiki / Bernard_ Madoff

4. Http: / / www.nytimes.com/2009/01/06/your-money/06wealth.html

5. Www.lectlaw.com/files/inv01.htm

BreadStreet Author: James F. Cotter

This article brought to you by 'Investors in BreadStreet Union http://BreadStreet.com

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The article also published on Associated Content