Bill Herbert

Madoff's Investors Don't Deserve Compensation or Sympathy

The Madoff "investors" apparently thought they were in on some sort of privileged "insider's" deal where, in a secret trading scheme (front running?? trading on non-public info?? stealing from others through the 'clearing' process??) the money magically flowed to Uncle Bernie, regardless of market direction, who was nice enough to share it with friends and people he rubbed elbows with at exclusive clubs.

Instead, they got clipped by a dangerous con man, and their money was essentially stolen. That is a real tragedy for them on a personal level, as is any crime victim's loss.

This investment profile is deeply flawed in so many ways, however, that it is hard to know where to begin. If you think you are in on some sort of secret scheme to extract money from the markets through illegal or shady means, then shame on you. If you put millions into Uncle Bernie's Ponzi scheme without bothering to check on obvious things like -

a) Where were the trade confirms from the other side of the fake trades?

b) Why did he have a joker auditor firm instead of a major firm? (I'll ignore the question of what a joke most of the major auditing firms are for another day)

c) Why was everything such a secret, with Bernie refusing to answer basic questions when potential investors came in for basic DD?

d) How were the returns so amazingly consistent, regardless of volume, market direction, interest rates, etc.?

e) Why would Bernie be motivated to share these illicit, magical gains, anyway?

f) Why were the statements frequently filled with trades that, upon simple examination, didn't correspond to market prices or volumes?

g) Why were the returns non-reproducable by anyone else who was examining the situation and attempting to validate Bernie's methods?

...then shame on you. Shame, shame, shame, and stop whining!

I'm not the most diversified investor, and I don't mind having 20% of my funds in one really good idea, or a very compelling sector bet, like long oil & gas producers in 2004, or short homebuilders in mid-2007 - but that's about as far as I go - putting 100% in to a hedge fund - which is what Bernie was running - is a total joke, and they are getting what they deserve for that huge mistake. The hedge fund world is crammed full of fraudsters, phony audits, and assorted criminal activity. Or don't you read the papers?

Yes, Bernie is a scumbag and it's too bad they lost a ton of money, but they were reckless and greedy, and it's certainly not the government's business to bail out suckers, rich or poor. As they say in Honduras - tough bananas.

They should sue the crap out of all the feeder funds and the shady characters who run them - I'd love to see the Courts go after some of these jokers who are shuffling money around, and lying to investors about DD and the consistency of returns - based on huge kickbacks from the managers. It's a pretty sordid business, and now the rotten side has been partially exposed. There's a lot more rot there, but again, that's for another day.

The Madoff 'victims" are lucky the SPIC is covering them - even that's pretty questionable - and to ask for more from the government is the height of vulgar greed.

Don't Be Scammed by Madoff Investor Sob Stories

>>Unfortunately, you are misinformed. Largely all of the Madoff accounts, in quantity of numbers, were held as segregated brokerage accounts with registered broker dealer Bernard L. Madoff Investment Securities LLC, no different than opening up an account with an E-Trade, Interactive Brokers, or Charles Schwab. Power of Attorney to only effect trades, not withdraw monies, was given to the individual person, Bernard L. Madoff. Daily P&S confirmations along with monthly activity & balance statements were sent to each account owner via first class U.S. Postal Service mail from Bernard L. Madoff Investment Securities LLC.

The trading occurred over a 20+ year period<<

In this case, the people who were part of this scam for 20 years should pay back into a fund to compensate those who got in later. Nobody should be allowed to walk away from this (complicit??) fraud with anything resembling a profit - ESPECIALLY the "fund-of-funds" types who are just parasites on the real economy.

Rather, the fellow travelers of "Bernie" should put everything they took out back into the pot, deduct the entirety of the huge sums that the Feds will spend (er...perhaps waste is a better term) and then split it up according to an equitable distribution scheme. That is the only way to deliver justice, without raping the American taxpayer. Or, is that (rape) what you think should happen here??

Don't Be Scammed by Madoff Investor Sob Stories

I agree - the Madoff "investors" should not get anything from SIPC. First of all, this was a Ponzi scheme, and I believe many of these so-called "investors" suspected some sort of front-running, market manipulation, insider trading, or other skulduggery by the supposedly-clever Madoff. Many have made statements that clearly show they knew Bernie's operation wasn't exactly on the up-and-up, but they loved the 'returns' they thought they were getting, and were a bit too greedy and clever for their own good.

Turns out - Madoff was just a common shyster, a ripoff artist who conned people into thinking he had a way to beat the market, when experts were all but proving it was a scam.

When you provide money to someone you think is running a fund that engages in some sort of dodgy activity to make a profit in the markets, you are not an investor - you are a part of what I would call a racketeering operation, and are no better than a mobster who provides backing to a guy running a crap game in the basement of some bar. You are abetting illegal activity, and you expect your cut.

I sincerely hope that the SIPC is not corrupted by these rich, greedy bloodsuckers - and I wouldn't give them one thin dime of taxpayer's money. It is bad enough that the SIPC and the FBI will spend tens of millions to sort out the crimes of this ba$tard Madoff - that is far more than I would like to pay to rectify the crimes and make the pain equal to all who got taken in - but that's as much as they deserve, period!