Friday, December 12, 2008, AM | Leave Comment
It was in the newspapers on Thursday Dec. 11, 2008 that a prominent trader has been accused of defrauding clients. The very famous trader, Bernard L. Madoff, was arrested at his Manhattan home by federal agents who accused him of running a multibillion-dollar fraud scheme – perhaps the largest in Wall Street’s history.
At age 70, Mr. Madoff had become an influential spokesman for the traders who are the hidden gears of the marketplace.
Regulators have not yet verified the scale of the fraud. But the criminal complaint – I have heard that before – filed against Mr. Madoff on Thursday in federal court in Manhattan reports that the estimated losses are in the neighborhood of $50 billion.
“We are alleging a massive fraud – both in terms of scope and duration,” said Linda Chatman Thomsen, director of the enforcement division at the Securities and Exchange Commission.
On Wednesday, Mr. Madoff invited a couple of senior executives to his Manhattan apartment in the evening. When they joined him there, he told them that his money-management business was “all just one big lie” and “basically, a giant Ponzi scheme.”
The senior employees understood him to be saying that he had for years been paying returns to certain investors out of the cash received from other investors. Some people do that with credit cards. Pay one credit card bill with another credit card.
In that conversation, according to the criminal complaint, Mr. Madoff “stated that he was ‘finished,’ that he had ‘absolutely nothing.’ ”
Mr. Madoff told the executives he intended to surrender to the authorities in about a week but first wanted to distribute approximately $200 million to $300 million to “certain selected employees, family and friends.”
So far, I have not received a single penny of that money. Wait a minute. Maybe it is because I am not among his employees, family and friends. That makes sense.
Moral of the story
- I am not in the $50 billion neighborhood wherever that is,
- I am not among his employees, family and friends,
- Maybe that’s why I have not received a single penny from the $200 million to $300 million that Mr. Madoff intends to distribute.
What do you think?
It seems that everything is up for grabs these days. I think we, the American people, should get a share of anything that gets distributed.