Madoff
Posted at 1:23 pm on Thursday, April 2, 2009, in Uncategorized, and tagged economics, madoff.
There exists an underlying defense of the Madoff ponzi scheme — a fraud that amounts to more than $50 billion — and it goes like this: If a person is stupid enough to invest all of their money with one person than they deserve it; they should have known better. This is the defense being used by the industry at the center of the fraud: the securities industry.
At face value, it may seem crude, but there is also an element of truth. A person’s assets should be well-balanced, a fundamental of sound investing. But the reality of the Madoff scenario does not qualify this argument. And any defense of Madoff is an endorsement of the malfeasance (and corruption) that plagues and threatens the American capitalist system.
Madoff sent his clients monthly statements, just like my financial company does, and just like yours. Those statements were fraudulent however. Is there a way for any typical investor to know that the statements were false? Is there a way for me to know if the statements I receive are false? Who do I call to make sure that I own X shares? How worried should I be that what my financial adviser tells me is actually true — not if stock X or Y is a good investment option, but if the amount of stock X I purchased is even real? This is the issue at hand. The entire industry is broken and deceitful, and worse, it is accepted, celebrated and even defended. Is this an industry that can regulate itself?
The securities industry must be flogged — in the open, and often. And unfortunately, there seems to be no resonance of the flagrant breaches of responsibility within the industry in the business schools today, from which future generations of traders, analysts and advisers will emerge. If that doesn’t change, we’re destined to repeat this travesty, and once again, permit the existing dynamic that plagues the industry, and has shaken the country so virulently.
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April 2nd, 2009 at 2:19 pm
ooh virulently……….me likee!
totally agreed. something bold must be done…….wait a minute..mr. obama is mr. bold……i think he’ll be fixing that a week from sunday!
April 5th, 2009 at 9:52 am
Madoff’s “defense,” if you charitably wish to call it that, is the old con-man’s argument of “blame the victim, not the criminal.” This “defense” has never been held to be a rational one, and it won’t be any more valid in this set of unfortunate circumstances as it had before. What is needed in the securities and investment sector is regulation, not public flogging. Would you have invested your hard-earned money in any kind of instrument which you didn’t understand, with the hopes that you’d earn money beyond your wildest dreams? I don’t think so.