why did Madoff go undetected?

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DaveW
why did Madoff go undetected?
DaveW

from the above: 

 Bernard L. Madoff Investment Securities LLC was examined at least eight times in 16 years by the Securities and Exchange Commission and other regulators, who often came armed with suspicions.

SEC officials followed up on emails from a New York hedge fund that described Bernard Madoff's business practices as "highly unusual." The Financial Industry Regulatory Authority, the industry-run watchdog for brokerage firms, reported in 2007 that parts of the firm appeared to have no customers.

Mr. Madoff was interviewed at least twice by the SEC. But regulators never came close to uncovering the alleged $50 billion Ponzi scheme that investigators now believe began in the 1970s.

The serial regulatory failures will be on display Monday when Congress holds a hearing to probe why the alleged fraud went undetected. Among the key witnesses is SEC Inspector General David Kotz, who was asked last month by the agency's chairman, Christopher Cox, to investigate the mess.

Fleabitn2

short answer: greed.

jrootham

Ye Gods and little fishes!!!  Lyndon LaRouche????

 

Fidel

Who among any of them has any credibility today whatsoever? LaRouche would likely be an improvement over herr Bushler et al aka Crazy George II and the inquisition in there now and who lost the popular vote count in 2000. 

abnormal

Madoff's choice of auditors should have set off enough alarm bells.  Fifty odd billion dollars supposedly spread over multiple countries and his auditor was a one man firm (actually two if you count the 70 year old and his son).

NorthReport

Why aren't these auditors under house arrest as well? Or are they that incompetent that the title accountant or auditor is now meaningless, and the ca profession needs to be disbanded.

Perhaps more importantly than investigating Madoff the accountancy profession needs to be investigated, as they were the ones that gave him the credibilitity to smoke his clients. The more I see of professionals the less confidence I have in them. Whlo needs these freaks? Whatever happened to good ole common sense?

Reminds of our current crop of stock brokers or investment dealers or whatever the fuck they call themselves this week. The stock market is down so there is a great buying opportunity now. Oh yea! The Japanese stock market was at 19,000 whatever 10 years ago, and dropped to 14,000 about a year ago. Another great buying opportunity they said then. Now the Japanese stock market is at 10,000. Keep listening  to those jerks and their latest pr bullshit "there's never been such a great buying opportunity", which gets repeated every time the stock market goes down, and you will go broke, and you will end up destroying everything you ever worked for.   

 

 

Fidel

NorthReport wrote:

Why aren't these auditors under house arrest as well? Or are they that incompetent that the title accountant or auditor is now meaningless, and the ca profession needs to be disbanded.

 I believe Bill Clinton agreed to eliminate the Glass-Steagall Act in place before that since the 1930's altogether. The Act put together in 1933, and among other things, separated banks into to two types: investment and commercial banking. These banking distinctions were blurred in the 1920's as well and are said to have been at the root cause of thousands of banking collapses across the U.S. from 1929 to 32-33 or so. Glass-Steagall has been whittled away at by private banking and other financial sector interests since about 1980.

 I think this Madoff thing is reminiscent of the tech bubble collapse at start of the 2000's. Bank managers and accountants were in conflict of interest doubling as stock promoters. Auditors were also promoting stocks. And sometimes stock promoters and banksters were hand in glove. There was less separation of roles at arm's length as the incestuous relationships gained momentum. Separation of FIRE, Finance, Insurance and Real estate sectors - pillars of their economy really- was once deemed necessary in FDR's time in order to save American capitalism from ruin.

People like Elliot Spitzer proposed sweeping changes and "new" regulations be implemented. I dont think it really happened though. Big business complained that all the new paperwork for the sake of scrutinizing their shady selves would not be affordable for smaller companies and would cause the smaller companies to fold up as a result. What they dont say is that less paperwork and regulation also happens to make it easier for big fish to swallow smaller ones in eliminating kapitalist competition.  There has been similar maneuvering with, for example, big sugar companies in the U.S. When they want to justify high prices for sugar in the US, they will trot out a small farmer infront of Congress, and there aren't too many small farmers left in the U.S., and wring their hands that lower sugar prices will cripple this poor farmer struggling to sell his harvest of sugar beet or whatever. The main thing is, they get their way through lobbying. All this proposed socialist regulation, they say, would only subtract from and hamper "the dynamism of capitalism" to build what is good and destroy the bad in some kind of Darwinian competition separating wheat from chaff, or some such. What it is is capitalism devouring itself.

Sky Captain Sky Captain's picture

Fidel wrote:

Lyndon LaRouche said:

Quote:

The GMAC "bank" swindle, in fact, overlaps the scandal of Bernard Madoff's $50 billion Ponzi scheme. The head of GMAC the new "bank"—installed as CEO by Cerberus Capital Partners 30 months ago—is a hedge fund operator, Ezra Merkin, who threw more of his investors' money into Madoff's scheme than any other "investment manager." How much from derivatives dealing on GMAC's debt was skimmed into Madoff's black hole by Merkin since 2006?

LaRouche noted that his Lyndon LaRouche Political Action Committee (LPAC) had widespread constituency pressure on Congress in support of his Homeowners and Bank Protection Act (HBPA), which would have put a "firewall" protecting the economy from the banks' breakdown crisis. Congress was blocked at the brink of introduction of the HBPA, and panicked into completely futile bank bailouts instead. "Now the entire system is collapsed, the economy is facing ruin—we must mobilize those constituencies to get a Congressional 'Pecora hearing' going immediately. This is the way to break [Speaker Nancy] Pelosi's grip on the Congress."

The ~"currently-onrushing collapse" of the financial system threatens "a new dark age" not unlike the 14th century plunge into darkness. That is, unless the global monetary system is put through bankruptcy proceedings. Scrap it all, says LaRouche, and reinstitute FDR's firewalls of regulation to save America and the world from the "thundering nit-wits" of Wall Street and the federal reserve etcetera. It's all the fault of that empiricist fraudster Paolo Sarpi along with Galileo, some other guys,  that "black magic specialist"Isaac Newton, and Prince Philip's lackey, the silly, but nasty former U.S. VP, Al Gore

I guess you haven't heard that Lyndon LaRouche
[url=http://publiceye.org/larouche/truestory.html]is a batshit crazy
racist extremist jive-ass motherfucker[/url], or you wouldn't be
posting his bullshit as if it were gospel....

 

abnormal

NorthReport wrote:

Why aren't these auditors under house arrest as well? Or are they that incompetent that the title accountant or auditor is now meaningless, and the ca profession needs to be disbanded.

At the risk of being pedantic, they're American, not Canadian, so they'll be CPA's not CA's.

And they will be sued.  However, given the nature of their operation, I'd be very surprised if they've got more than a couple of million in professional liability coverage so there is no deep pocket there.

The reality is, they should have either (i) declined the assignment up front, (ii) resigned when the Madoff's operation exceeded their capabilities [the logistics of handling audit confirms alone would have exceeded their capabilities], or (iii) subcontracted the work to someone that had the resources and expertise to handle the assignment.  Not doing so is a dereliction of their professional responsibilities and I'm sure constitutes a violation of the AICPA's Code of Conduct.  I don't know how disciplinary procedures work in that body but I would expect that they will end up in front of the relevant disciplinary board sooner or later [more than likely later since there isn't much that the AICPA can do until all the court cases have settled].

I'd also question the actions of the auditors for the various feeder funds.  If Fund X gave Madoff a billion dollars of their assets to invest I would expect that X's auditors would want to at least look at Madoff's accounts and would have requested confirmation that the billion dollars had been invested etc.  You'd think that they'd have questioned why a no-name accounting firm was auditing a multi-billion, multi-national investment operation.  [Expect those feeder funds to be sued along with their auditors.]

As an aside, without trying to defend their actions, most people do have a misunderstanding of the nature of an audit and the responsibilities of an auditor.  Their primary function is not to detect fraud nor is it to check that every single transaction entered into during the year is correctly accounted for. 

 

abnormal

Quote:
And whose fault is that that the public does not know what auditors do and don't do?

Good question.  While I think that the relevant accounting bodies could do a better job of telling the world what they do I also think that people should bear some responsibility for determining that themselves.  And I haven't seen an audit report yet that doesn't lay out what has been done in some detail.  The problem is people actually have to read them to see what they are [I've actually had people send me compilation reports when I've asked for audited financials] and what exactly they cover.  That includes reading the footnotes for discussions of little things like off balance sheet liabilities and so forth.  In addition to the audit report, annual reports generally include discussions of risk factors and so forth.  There's generally a huge amount of material available if you do even a modicum of digging.  Of course if you can't get audited financials and/or annual reports for whatever you're looking to invest in, run for the hills.

Quote:
Why have accountants misled society about what they do or don't do?

While I won't pretend that you won't run across the occassional bad apple the accounting profession is generally pretty specific about what they've done with respect to a particular entity.  All that's required is reading the report.

Quote:
And they keep pumping out the mantra that we don't need government intervention and protection.

Simply increasing the level of regulation doesn't work.  If someone actually wants to cheat they'll figure out a way to do it.  Simply saying it's illegal won't make any difference (murder is illegal but people still do it).

And introducing more accounting rules doesn't solve the problem either.  As soon as you introduce new rules people figure out ways to use them to accomplish whatever they want.  But that still requires that people read the financials and understand the impact of the accounting rules (and rule changes).  [It remains to be seen how the adoption of IFRS will impact things - personally I think it's going to make financial statements even more opaque but that's just me.]

But regardless of what you do, what sort of laws and or regulations are put in place, people still have to read annual reports, prospectuses, PPMs, red herrings, or whatever, and figure out what they say.  Absent that, doesn't matter how many rules are in place, people will still make inappropriate investments.  [If someone can't understand the document in question I'd argue that the investment is inappropriate.]  In the US at least there are rules in place that restrict certain types of investments to so called "sophisticated investors" and those rules define what exactly a sophisticated investor is (typically based on income and/or net worth) so hopefully the investors there aren't completely naive.

 

Fidel

Sky Captain wrote:
Fidel wrote:

Lyndon LaRouche said:

Quote:

The GMAC "bank" swindle, in fact, overlaps the scandal of Bernard Madoff's $50 billion Ponzi scheme. The head of GMAC the new "bank"—installed as CEO by Cerberus Capital Partners 30 months ago—is a hedge fund operator, Ezra Merkin, who threw more of his investors' money into Madoff's scheme than any other "investment manager." How much from derivatives dealing on GMAC's debt was skimmed into Madoff's black hole by Merkin since 2006?

LaRouche noted that his Lyndon LaRouche Political Action Committee (LPAC) had widespread constituency pressure on Congress in support of his Homeowners and Bank Protection Act (HBPA), which would have put a "firewall" protecting the economy from the banks' breakdown crisis. Congress was blocked at the brink of introduction of the HBPA, and panicked into completely futile bank bailouts instead. "Now the entire system is collapsed, the economy is facing ruin—we must mobilize those constituencies to get a Congressional 'Pecora hearing' going immediately. This is the way to break [Speaker Nancy] Pelosi's grip on the Congress."

The ~"currently-onrushing collapse" of the financial system threatens "a new dark age" not unlike the 14th century plunge into darkness. That is, unless the global monetary system is put through bankruptcy proceedings. Scrap it all, says LaRouche, and reinstitute FDR's firewalls of regulation to save America and the world from the "thundering nit-wits" of Wall Street and the federal reserve etcetera. It's all the fault of that empiricist fraudster Paolo Sarpi along with Galileo, some other guys,  that "black magic specialist"Isaac Newton, and Prince Philip's lackey, the silly, but nasty former U.S. VP, Al Gore

I guess you haven't heard that Lyndon LaRouche [url=http://publiceye.org/larouche/truestory.html]is a batshit crazy racist extremist jive-ass motherfucker[/url], or you wouldn't be posting his bullshit as if it were gospel....

That's funny. Because that's exactly what the batshit, trade mark smear tactics crazy mofos in the two old line U.S. parties say about him, too. Meanwhile those two parties of the rich are political shell organizations for war criminals, crooks, liars, and crooked-liars.

 

Fidel

Quote:

A whipping boy, in the 1600 and 1700s, was a young boy who was assigned to a young prince and was punished when the prince misbehaved or fell behind in his schooling. Whipping boys were established in the English court during the monarchies of the 15th century and 16th century. They were created because the idea of the Divine Right of Kings, which stated that kings were appointed by God, implied that no one but the king was worthy of punishing the king’s son. Since the king was rarely around to punish his son when necessary, tutors to the young prince found it extremely difficult to enforce rules or learning.

abnormal

The SEC is looking for a scapegoat.  They've screwed up royally and it's not just Cheung that's responsible.  They've received numerous tips over the years (they've supposedly investigated him at least 8 times in the last 16 years) and every time they've given him a clean bill of health.  No way is she the only guilty party here.

The lady clearly bears a lot of responsibility since it seems she didn't have the mathematics background required to understand what's going on here and, as such, should either have removed herself from the case or insisted on receiving support from staff that were qualified.  But any attempt to pin the whole thing on her is unjustified and is most politely defined as a serious effort at CYA.

http://tinyurl.com/8ka4dp

Quote:

The Securities and Exchange Commission confessed Tuesday it blew chance after chance for at least a decade to uncover what may be the biggest financial fraud ever.

Chairman Christopher Cox ordered a probe by the SEC's inspector general, saying the agency's staff had "credible and specific allegations" but never brought them to commissioners.

He ordered all SEC staffers who had contact with Madoff or his family removed from the investigation.

Cox called his agency's lack of action "deeply troubling" and said, "I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them."

The SEC's enforcement division investigated Madoff's company only last year, without bringing a claim.

Because the SEC staffers never recommended that the commission open a formal investigation, no subpoena power was used to get information.

Instead, staffers relied on information voluntarily produced by Madoff and his firm.

etc....

 

DaveW

 

the SEC regulator of Madoff getting bombed by media:

http://tinyurl.com/7u4qfu
 "Why are you taking a mid-level staff person and making me responsible for the failure of the American economy?" an upset Meaghan Cheung, with eyes tearing up, told The Post.

"I worked very hard for 10 years to make a career, and a reputation, and that has been destroyed in a month," said Cheung, who was the SEC's branch chief of the New York enforcement division during that unit's earlier probe of Madoff's brokerage business.

The 37-year-old has been singled out by whistleblower Harry Markopolos as the woman who failed to detect the scam despite his lengthy warnings. It was Cheung who signed off on a 2006 SEC investigation that effectively gave Madoff the all clear.

[...]

 Cheung and other SEC staffers had met Markopolos in New York in November 2005, after years of him suggesting to the agency that Madoff was an arch-crook. Markopolos once had worked at a rival firm, but Cheung told The Post, "I didn't have enough interactions with [Markopolos] to be able to judge his motivations."

Markopolos gave the investigators a long memo that flatly said that "Madoff Securities is the world's largest Ponzi scheme."

Soon after, in January 2006, the New York branch of the SEC opened an enforcement case on Madoff based on Markopolos' claims. The document authorizing that probe is signed by three SEC staffers: Cheung, attorney Simona Suh, and Assistant Director Doria Bachenheimer.

But after interviewing Madoff and a principal of Fairfield Greenwich Group -his biggest hedge-fund investor - as well as reviewing documents, the SEC probe "found no evidence of fraud," according to a case closing recommendation signed off by those three staffers.

The probe did find that Madoff had violated regulations by acting as an investment adviser without registering, but said he should not be disciplined because he had remedied the situation.

Philip Michael, a lawyer for Markopolos, said the failure by Cheung and the other probers to find Madoff's fraud suggests that "she just didn't understand what was going on" even after Markopolos gave her a road map.

 

Wesen ist was Gewesen ist

Sky Captain Sky Captain's picture

Except that this article isn't the only one that talks about him; here's some more info-[url=http://www.freedomofmind.com/resourcecenter/groups/l/larouche-movement/] LaRouche Movement Factsheet by Steve Hassan[/url] 

Perhaps I didn't make my point clear about him, so here's some of the text of the linked article from the previous post:

Quote:

Lyndon LaRouche: Man of Vision or Venom?
What's the Real Story?

Supporters of Lyndon H. LaRouche, Jr. seem to be everywhere these
days: on street corners, behind campus literature tables, outside post
offices, at anti-war meetings and demonstrations. Is the man behind the
LaRouche Youth Movement a progressive mentor for young activists? Is he
really-as some of his supporters suggest-one of the world's greatest
living economists and philosophers? Is LaRouche, the perennial
presidential candidate, an important leader in the Democratic Party? Or
is Lyndon LaRouche a self-promoting demagogue surrounded by devoted
followers who sanitize his long history of bigotry and crackpot
statements, and dismiss his criminal conviction as the result of a vast
conspiracy?

Twenty years ago these questions weren't necessary. Back then, a
wide range of activists across the political spectrum readily denounced
Lyndon LaRouche and his international network as a fascistic
totalitarian group spreading lunatic political theories, monitoring
progressive activists and providing the information to government
agencies, and engaging in dubious fundraising schemes.1

These days, browsers stopping by a LaRouche table at an anti-war
rally may be unaware of his past, or the truth about his political
views. LaRouchite publications critical of the Bush Administration, the
neoconservatives, and the Iraq War can seem appealing to progressives.
So let's review the LaRouche record.

Sexism and Misogyny

LaRouche has written about "Mothers' Fears," the many psychological
problems of activists allegedly caused by their moms. An early
LaRouchite editorial declared that "all across the U.S.A., there are
workers who are prepared to fight. They are held back, most
immediately, by pressure from their wives." 2
Women in the LaRouche organization at the time report they were
verbally attacked in long criticism sessions as "witches," and
"sadistic bitches" and were accused of "mother-dominating" the male
members. 3

One former member said she left the LaRouche group in disgust when
told that women's feelings of degradation were because female sexual
organs are near the anus, thus causing women to confuse sex with
excretion. 4

Racism

LaRouche and some of his followers spread racist ideas that range
from the absurd-such as the claim that Black musicians did not invent
Jazz5-to
the crude, as in the question posed by LaRouche in one essay: "Can we
imagine anything much more viciously sadistic than the Black Ghetto
mother?" 6
It's not just Blacks LaRouche has a problem with. He has dismissed
rural Chinese culture as "hideous muck" with its people "paralleling
the behavioral stagnation of lower animal life." 7
Elsewhere he dissed a group of Puerto Rican organizers as incompetent,
which LaRouche asserted was tied to their being "almost totally
sexually impotent."8

While the cultural accomplishments of people of color have been
routinely dismissed by LaRouche, he regularly celebrates Eurocentric
icons. We all become civilized, according to the LaRouchites, by
learning to sing along with Bach, Mozart, and Beethoven; 9 reading the work of 17th century European scholars such as Leibniz; 10 and, surprise, studying the words of LaRouche.

[url=http://publiceye.org/larouche/truestory.html] Lyndon LaRouche: Man of Vision or Venom?[/url]

 

 
 

 

NorthReport

"As an aside, without trying to defend their actions, most people do have a misunderstanding of the nature of an audit and the responsibilities of an auditor.  Their primary function is not to detect fraud nor is it to check that every single transaction entered into during the year is correctly accounted for. "

And whose fault is that that the public does not know what auditors do and don't do? Why have accountants misled society about what they do or don't do? This is what happens when you bullshit people. The public gets a false sense of security and then their life savings get destroyed. And they keep pumping out the mantra that we don't need government intervention and protection. It's not difficult figuring out to whose advantage that is.  

 

 

M. Spector M. Spector's picture

[url=He">http://business.theglobeandmail.com/servlet/story/RTGAM.20090204.wmadoff... blew the whistle – and no one listened[/url]

Quote:
Harry Markopolos spent 17 years in the U.S. Army Reserve and managed troops overseas, but he has never been so scared as when he began investigating Bernard Madoff.

"I thought I was a dead man," Mr. Markopolos told a congressional committee Wednesday. "I didn't think I was long for this world."

Mr. Markopolos, a former fund manager, has been hailed as a whistleblower in the Madoff case, having spent eight years probing Mr. Madoff's New York-based investment firm and trying to persuade the Securities and Exchange Commission to get involved. During his testimony Wednesday, which included discussions about complex financial products and his fears about the Russian mob, Mr. Markopolos railed against regulators, The Wall Street Journal and some accountants for failing to pick up on the alleged $50-billion (U.S.) Ponzi scheme.

But most of his venom was aimed at the SEC. "If you flew the entire SEC staff to Boston, sat them in Fenway Park, they would not be able to find first base," he told the committee. The SEC "is a group of 3,500 chickens tasked to chase down and catch foxes which are faster, stronger and smarter than they are."

Mr. Markopolos began looking into Mr. Madoff in 1999...

Mr. Markopolos took his concerns to the SEC office in Boston in May, 2000, handing over an eight-page report that said "Madoff Securities is the world's largest Ponzi scheme." The report was ignored, along with several others he sent, including one that ran 32 pages.

Over the next eight years, Mr. Markopolos said he spent hours with senior SEC officials in Boston, New York and Washington and even offered to work undercover for the agency. He said many SEC officials couldn't understand some of the basic financial concepts he was explaining and others treated him with scorn, refusing to return his calls. Frustrated by the SEC, he said he went to The Wall Street Journal in 2005 but was shot down by senior editors who declined to pursue the story.

As he and some colleagues kept digging, they became convinced Russian mobsters had invested in Madoff funds. "My team and I surmised that if Mr. Madoff gained knowledge of our activities, he may feel threatened enough to seek to stifle us," he said....

In April, 2008, Mr. Markopolos said he gave up after yet another SEC official failed to return his calls. A few months later, Mr. Madoff was arrested and charged with orchestrating a $50-billion fraud.

Mr. Markopolos, now an independent investigator, has complained about the SEC for years. On Wednesday, he said the commission was unable and unwilling to take on Wall Street.

abnormal

[url=Madoff">http://wcbstv.com/breakingnewsalerts/bernard.madoff.clients.2.927371.htm... Client Names Revealed[/url]

 

Quote:
The names of several thousand clients who lost money investing with Bernard Madoff have been released in a New York City court filing. 

His potential victims are so numerous, so high-profile and the sums he apparently stole so vast, the financial analyst who blew the whistle on Madoff says he expected a bullet or worse for his trouble.

"If he found out we were tracking him, I did not think I was long for this world," said Harry Markolpolis.

The riveting testimony came on Capitol Hill as a seemingly endless list of victims was released in a court filing in New York.

snip...

There was clean money apparently mixing with dirty money funneled into Madoff Securities through off-shore accounts.

"When you're that big and that secretive you're going to get money from criminals like the Russian Mob and the drug cartels," said Markopolis.

etc...

It's interesting that people are finally waking up and realizing that in addition to legit investors something this big had to have been attractive to anyone that wanted to launder money.  Feed the funds in and when they're withdrawn they're automatically clean [and, if Madoff had been on the up and up the transaction costs would have been minimal].

The linked article contains a link to all the investors (167 pages worth). 

Tommy_Paine

 

Much has been said about the SEC being incompetent. That seems to be the line of deffense in the States and in Canada whenever some professional people being paid big bucks runs into trouble.

I'm not sure it's a deffense that should be allowed.

wwSwimming

Fidel wrote:
I believe Bill Clinton agreed to eliminate the Glass-Steagall Act in place before that since the 1930's altogether. The Act put together in 1933, and among other things, separated banks into to two types: investment and commercial banking.

People like Elliot Spitzer proposed sweeping changes and "new" regulations be implemented.

the repeal of the Glass Steagall Act, a joint effort by Phil Gramm (Repub) and Clinton (pseudo-Democrat), created the pre-conditions for the un-regulated frenzy of financial derivatives from the late '90's to 2008.

Eliot Spitzer came the closest to bringing regulatory pressure on the chaos. About a week after this article he wrote printed was printed in the Wash. Post, his mistress entanglement came to public view.

Those 2 things - the repeal of Glass Steagall, and the silencing of a whistleblower (accidental or not), helped to maintain the environment in which people like Madoff could flourish.

I think it will be a while before we know all the details/ the pieces of the puzzle fall together, regarding Madoff.

http://business.smh.com.au/business/madoffs-assets-to-be-kept-secret-200...

"Madoff's assets to be kept secret"

So, the problem is lack of transparency - that's what allows these frauds to flourish. And the solution - more lack of transparency ?!

One of the most interesting op-eds I've seen about Madoff relates to his ties to Israel, and suggests that $40 of the $50 billion was moved to Israel before the game ended.

http://www.tbrnews.org/Archives/a2906.htm#001

Not well referenced, but thought provoking.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

http://LASIK-Flap.com ~ Health Warning about LASIK Eye Surgery

abnormal

That's not a defense.  The fact that the regulators aren't capable of catching something this big is a serious indictment of the regulatory regime but it's not a defense for Madoff's actions.  And I've never seen anyone use it as a defense - plenty of people have asked why Madoff didn't get caught years ago but I've never seen anyone say that what he did was okay because he didn't get caught.

That doesn't mean that more regulation is needed, it just means that the regulators need to be given the tools and/or staff to do their jobs.  If the SEC investigators don't have the knowledge and/or smarts to understand what Madoff claimed to be doing and weren't willing (or able) to pick up on the obvious clues that's a problem that needs to be addressed.

Tommy_Paine

 

Speaking of regulators, it broke yesterday or today that the FDA in the States knew about the samonella contamination in peanut butter, but did nothing when the company (who also knew)  shipped suspect product.

 

Fidel

abnormal wrote:

The riveting testimony came on Capitol Hill as a seemingly endless list of victims was released in a court filing in New York.

snip...

There was clean money apparently mixing with dirty money funneled into Madoff Securities through off-shore accounts.

"When you're that big and that secretive you're going to get money from criminals like the Russian Mob and the drug cartels," said Markopolis.

ha ha They want to slide blame everywhere but where it lies, with a system that is corrupt as the day is long. 

 

NorthReport

Precisely my dear Watson, precisely. 

Hoodeet

Larouche's journal (if we can call it that) was one of the first to  spread certain interesting pieces of historical information, e.g., the link between the Bush banking interests and Nazi Germany from the 20's to the 40's, and the overthrow of Peron in Argentina for refusing to enter into agreements with the IMF in the 50's.  Having said that, it's also a hodge-podge of progressive notions, useful data and misleading facts and lies and slander.

Larouche started out with an extremist Marxist-Leninist (or pseudo-same) group in the early 70's, whose trademark was showing up on picket lines and threatening or encouraging violence against bosses and scabs.  Even then his views and tactics justified calling him "left-fascist", if he ever was "left".

Larouche's wife, I believe, co-founded and heads (or headed) the Schiller institute (see http://www.schillerinstitute.org/), ostensibly separate from the political outfit. It's a promoter, indeed, of Germanic civilization focusing on the age of Enlightenment and a public advocate of world peace (they have co-opted a veteran of the US Civil Rights movement as a vice-president and ambassador at large, which could be intended to de-fuse allegations of racism).

Larouche's people, for those whom remember the 70's and early 80's, were the ones at airports and other public places with the NUKE THE WHALES and NUKE JANE FONDA signs --  contentious debaters who would engage you in a flash into unwinnable arguments that usually culminated in a gross put-down or veiled threat if you were too hard-headed a debater. 

Unfortunately, Larouche served prison time for politically-unrelated reasons, which enabled him and his followers to tout him as a political prisoner and make their anti-establishment rants more credible.

Scary, venomous, and often persuasive. 

They pose as intellectuals, when in fact they don't measure up in the least to those I think of as their direct counterparts -- the Reunification Church (the Moonies), who are over all far more rigorously educated and disciplined thinkers and debaters and certainly more pleasant human beings. (Their smiles are genuine, at least, not just the baring of fangs of Larouche's cadres.) 

The non-followers who fall for their attractive slogans and notions can be conned to  become useful trolls on sites like this one .

I'd say: Get them off, please.

 

 

Fidel

Hoodeet wrote:

The non-followers who fall for their attractive slogans and notions can be conned to  become useful trolls on sites like this one .

I'd say: Get them off, please.

Troll? As a dues-paying supporter of rabble, I resent being called a troll. Can you point to anything on Larouche's site that is illegal or overtly fascist? Because in the USSA, a fascist is anyone who doesnt agree with the plutocracy. It's a fairly vague term in that country known for their pro fascists, anti-semites, and corporate friends of the 1930's-40s Hitlerian Nazis.

abnormal

Fidel wrote:
abnormal wrote:

The riveting testimony came on Capitol Hill as a seemingly endless list of victims was released in a court filing in New York.

snip...

There was clean money apparently mixing with dirty money funneled into Madoff Securities through off-shore accounts.

"When you're that big and that secretive you're going to get money from criminals like the Russian Mob and the drug cartels," said Markopolis.

ha ha They want to slide blame everywhere but where it lies, with a system that is corrupt as the day is long. 

I have no idea why this is supposedly sliding blame.  All it says is that he was getting funds from lots of places, some legit, others not.  That's to be expected.  Given the sheer magnitude of the dollars he was playing with his fund presented a perfect mechanism for money laundering and presented an opportunity to make a profit. 

As an aside, this may well be why the courts told him to get bodyguards. 

Hoodeet

Point taken, Fidel. 

 

Fidel

EDITED 

Is Lyndon Larouche either a fascist or anti-semite?

Fidel

I'm definitely not trying to be a troll, and I've heard complaints about LaRouche linked with anti-semitism and fascism before. Point taken, Hoodeet. Removed at your request until I can determine otherwise.

Ken Burch

Fidel wrote:

EDITED 

Is Lyndon Larouche either a fascist or anti-semite?

"survey says: BOTH". 

Trust me, Fidel, there are better sources on the issues we're talking about

than the LaRouchies. 

_________________________________________________________________________________________________ Our Demands Most Moderate are/ We Only Want The World! -James Connolly

NorthReport

Plus ca change, plus ca reste la meme chose...... 

Madoff’s Wife Withdrew $15.5 Million, State Claims (Update3)

http://www.bloomberg.com/apps/news?pid=20601087&sid=areBBVFwhmiA&refer=home

Bernard Madoff’s wife withdrew $15.5 million from a brokerage account at a firm co-owned by her husband late last year, including $10 million on the eve of his arrest, Money mouth  Massachusetts securities regulators said.

Ruth Madoff, 67, removed $5.5 million on Nov. 25 and the rest on Dec. 10 from New York-based Cohmad Securities Corp., according to a complaint filed today by Secretary of the Commonwealth William Galvin. Bernard Madoff was arrested Dec. 11 for allegedly operating a $50 billion Ponzi scheme.

Galvin, the state’s top securities regulator, said evidence of the withdrawals supports his claim that Cohmad and Bernard L. Madoff Investment Securities LLC are “so intertwined that they could be viewed as a common enterprise.” He is seeking to revoke Cohmad’s state securities registration for failing to fully cooperate with his investigation about its relationship with Madoff.

“We cannot tolerate licensed securities dealers who refuse to assist in the detection and prosecution of fraud,” Galvin said in a statement today.

Ira Sorkin, an attorney for both Bernard and Ruth Madoff didn’t immediately return a call for comment on Galvin’s complaint. While Ruth Madoff hasn’t been charged in the case, a person familiar with the investigation told Bloomberg News in December that U.S. regulators were trying to determine whether she maintained secret records related to the alleged scheme.

NorthReport

Absolutely amazing - Madoff made no trades over a 13 year period. Don't you just love accountants.

Quote:
Investors wiped out by the Bernard Madoff scandal got more bad news Friday: Investigators have confirmed suspicions that the monthly statements showing the financier was making stock trades for them were pure fiction.

“We have no evidence to indicate securities were purchased for customer accounts” in the past 13 years, court-appointed trustee Irving Picard said at a packed, town hall-style meeting at U.S. Bankruptcy Court in Lower Manhattan. “This is a case where we’re going to be looking at cash in and cash out” – the shorthand definition of a Ponzi scheme.

Picard, who’s overseeing the liquidation of Bernard L. Madoff Investment Securities LLC, called the meeting to give the investors a progress report on his efforts to unravel the alleged fraud.

Madoff was arrested in December after investigators said he confessed to his sons that he’d swindled investors of $50 billion. The 70-year-old former Nasdaq chairman remains confined to his Manhattan apartment under house arrest.

The trustee so far has recovered an estimated $950 million in assets that would be used to help cover claims likely to reach into the billions. A lawyer working for Picard also warned that the trustee would seek to recover – or “claw back” – phony profits earned by some investors so they can be redistributed to others.

Quote:

remind remind's picture

You know I just do not feel sorry for those who have invested in the "stock market" and who have lost all their investments. Apparently they learned nothing from history, recent history at that. Moreover, greed is the motivator for investing in the stock market. They are no different in that respect than those who stole their money.

All a stock market is, is for those making cash off of, or those who want to, those who produce and the resources that they produce from, it is parasitic, pointless and needless.

NorthReport

Well our Canada Pension Plan has investments in the stock market which may well decrease the amount Canadians will receive in the future in their pension checks. We were happy to go along with this change initially because the stock market was rising but these stock market investments by the CPP should never have been made in the first place. When something is wrong, it's wrong, no matter how good it looks with its wrapping paper on. These CPP investors should not be investing another cent in the stock market from now on but have they stopped. No way as these professionals have not got a clue what they are doing. The whole lot of them should be given the boot. Where is the accontability? Where is the Canadian anger towards these idiots!!!

remind remind's picture

Speak for yourself, I was NOT happy to go along with it, I am not that short sighted, and I understand, that those who know no history are destined to repeat it, or allow it to be repeated.

I knew exactly what was going to happen to our pension funds the minute they did it, and moreover, I believe that it was most likely a planned occurance.

M. Spector M. Spector's picture

What, if anything, should Canada Pension Plan funds be invested in?

remind remind's picture

Nothing

Fidel

[url=Who">http://onlinejournal.com/artman/publish/article_4385.shtml][=medium...’s behind Madoff?[/][/url]
By Wayne Madsen

Quote:
WMR has learned that in addition to 20 million documents stored by Madoff in a warehouse in Queens that were stored without any indexing system and merely placed in boxes and strewn around the floor are millions of additional documents that were stored by Madoff in a Brooklyn warehouse that was partially flooded. A number of the Madoff documents there were destroyed by water damage.

WMR has also learned that a key element in Madoff’s Ponzi scheme was Madoff Energy LLC, formed as a Delaware corporation in February 2007. Other Madoff firms in the energy arena were Madoff Energy Holdings LLC, Madoff Energy III LLC, and Madoff Energy IV LLC. There are links between these now-defunct Madoff energy entities and Texas oil and natural gas industry interests, some close to the Bushes and Dick Cheney.

WMR has also learned that the kid glove treatment given by federal authorities to Madoff, including allowing him to remain in his Upper East Side luxury town home, is because Madoff’s Ponzi scheme was part of a much larger operation, one involving top officials of both the George W. Bush and Barack Obama administrations, as well as the notorious Russian-Israeli Mafia.

remind remind's picture

Well well well, as I said planned out for a long time.

NorthReport

M. Spector wrote:
What, if anything, should Canada Pension Plan funds be invested in?

What's wrong with the way it was prior to its foray into common stock shares? Canadian or provincial government bonds for instance, where there is little risk of losing the capital.

remind remind's picture

Exactly, NR

NorthReport

The main problem is the schools have churned out 1000s of MBAs who all think in only one direction, which is based totally on greed and power, so anyone who challenges their idiotic approach to economics is ridiculed by these management schools, their graduates, the multinationals, governments, and of course the press.  And they run the show, and they are running most of our society into the ground. 

 

To most of the folks in the financial community, people like Madoff are heroes, and their only mistake is getting caught, because it has a slight possibility of discrediting the financiers. With the resources at their disposal, they need not worry.

abnormal

Fidel wrote:

[url=Who">http://onlinejournal.com/artman/publish/article_4385.shtml][=medium...’s behind Madoff?[/][/url]
By Wayne Madsen

Quote:
WMR has learned that in addition to 20 million documents stored by Madoff in a warehouse in Queens that were stored without any indexing system and merely placed in boxes and strewn around the floor are millions of additional documents that were stored by Madoff in a Brooklyn warehouse that was partially flooded. A number of the Madoff documents there were destroyed by water damage.

WMR has also learned that a key element in Madoff’s Ponzi scheme was Madoff Energy LLC, formed as a Delaware corporation in February 2007. Other Madoff firms in the energy arena were Madoff Energy Holdings LLC, Madoff Energy III LLC, and Madoff Energy IV LLC. There are links between these now-defunct Madoff energy entities and Texas oil and natural gas industry interests, some close to the Bushes and Dick Cheney.

WMR has also learned that the kid glove treatment given by federal authorities to Madoff, including allowing him to remain in his Upper East Side luxury town home, is because Madoff’s Ponzi scheme was part of a much larger operation, one involving top officials of both the George W. Bush and Barack Obama administrations, as well as the notorious Russian-Israeli Mafia.

Interesting site.  If you go to the author's home page it seems to be a compilation of conspiracy theories.  New World Order, 9/11 truthers, and so forth.  I don't think I'd give him too much weight.

remind remind's picture

*snerk*, the man has ponzied billions, never launched a trade on the stocket market with said investment money, yet was the president of NazD and you say z'nothing to see here. move along.."

Fidel

Yes, the Truthers' cred is always questioned whereas crooks, liars, and crooked-liars Inc. apparently still maintain a strong support base. Pffff!

NorthReport

There was a similiar type scheme in Vancouver in the 80s. The company was called King Lung Commodities, it was on Cambie Street near Marine Drive, and not downtown. Why bother processing trades when you have do all that paperwork, pay trading fees, etc. Seriously as an outsider, how can you tell for sure if your broker actually executes a trade on your behalf. You can't.

http://www.leg.bc.ca/Hansard/33rd2nd/33p_02s_850215a.htm#04993

abnormal

Fidel wrote:

Yes, the Truthers' cred is always questioned whereas crooks, liars, and crooked-liars Inc. apparently still maintain a strong support base. Pffff!

Not to worry.  If the bulk of the article you linked is true, Madoff is a walking dead man - the only reason he's alive is some very bad people think they'll get more money back with him alive than dead.

NorthReport

This is/was a blue chip Canadian stock.

How can you make money with a situation like this?  Unless you short the market that is. Do you see how long it takes for a stock to rise but how quickly it drops.

http://investdb.theglobeandmail.com/invest/investSQL/gx.show_chart?pl_comp_id=165832&pl_errmsg=&iaction=Chart&pl_primary_listing=RY-T&iaction=Chart&pl_additional_listing=0&pl_period=60M&pl_chart_type=+&pl_sh_movement=0&pl_long_movement=0

Royal Bank of Canada | Chart

  • 27.070
  • -0.860
  • -3.08%
  • Vol: 7,526,135
  • Last Trade: Feb 20, 2009 16:51:27 EST

  

Lard Tunderin Jeezus Lard Tunderin Jeezus's picture

Two points, so that this otherwise important thread doesn't continue to go off the rails:

I don't think there's any contradiction in thinking that a a highly successful and wealthy racist might have special insights into the financial world. Indeed, I think racism may be rather common amongst the top echalon of financiers.

Secondly, it's clear that Madoff was detected somewhat regularly. The question really seems to me to be: who was protecting Madoff, and why? 

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