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re: Did Madoff's wife and kids know about the scheme
Posted on 1/16/23 at 1:43 pm to Gee Grenouille
Posted on 1/16/23 at 1:43 pm to Gee Grenouille
His sons had to have known something really shady was going on downstairs.
They knew that everyone on the 19th floor were typical finance guys. Well educated, connected types. Downstairs however are less educated people with absolutely no background in finance. That had to raise major red flags for them.
Maybe they assumed the advisory business was essentially only being run by Bernie himself and that's why it wasn't important to have your typical traders and analysts down there but at some point the money he was managing couldn't have escaped their attention.
Also I'm pretty sure everyone on Wall St assumed Bernie was running some sort of fraud. They were probably all floored to learn it was a Ponzi though. Running a Ponzi for that long wouldn't have seemed possible.
They knew that everyone on the 19th floor were typical finance guys. Well educated, connected types. Downstairs however are less educated people with absolutely no background in finance. That had to raise major red flags for them.
Maybe they assumed the advisory business was essentially only being run by Bernie himself and that's why it wasn't important to have your typical traders and analysts down there but at some point the money he was managing couldn't have escaped their attention.
Also I'm pretty sure everyone on Wall St assumed Bernie was running some sort of fraud. They were probably all floored to learn it was a Ponzi though. Running a Ponzi for that long wouldn't have seemed possible.
1
Posted on 1/16/23 at 1:48 pm to GumboPot
Imagine stealing $19 billion. Sheesh!
It's part of why I hate how certain talking heads who cover wall street slam crypto so much. I'm not saying certain people in crypto don't deserve it, but slam them and their shitty businesses, not the technology behind it simply bc they can't understand it. The traditional financial system (banks, wall St, etc) has been doing this type of thing for hundreds of years and they have no problem looking the other way, especially when beneficial to them. And I'm no crypto diehard. I just think it's a foolish look.
It's part of why I hate how certain talking heads who cover wall street slam crypto so much. I'm not saying certain people in crypto don't deserve it, but slam them and their shitty businesses, not the technology behind it simply bc they can't understand it. The traditional financial system (banks, wall St, etc) has been doing this type of thing for hundreds of years and they have no problem looking the other way, especially when beneficial to them. And I'm no crypto diehard. I just think it's a foolish look.
This post was edited on 1/16/23 at 1:49 pm
Posted on 1/16/23 at 1:51 pm to LSUA 75
quote:
Few planned to work for SEC long term.They would do it a few years for the experience and then get a corporate job as a compliance officer.
So like today. This is SOP FWIW.
Look that the FTX scandal today. The SEC's Gary Gensler is not far removed from Caroline Ellison, the CEO of Alameda Research hedge fund that was founded by SBF to launder FTX money. Caroline's parents are professors at MIT, as was Gary Gensler and they were/are close friends.
It's a cartel. A cartel that looks like geeks but are just as criminal as Mexican cartels.
Posted on 1/16/23 at 1:53 pm to GumboPot
quote:Damn, I had no clue SBF was killing thousands of people every year.
cartel that looks like geeks but are just as criminal as Mexican cartels.
I get your point though.
Posted on 1/16/23 at 1:55 pm to Auburn80
quote:
Wife had to know something was up.
Didn't she get to continue living in their high end apartment even after he was convicted?
Posted on 1/16/23 at 1:56 pm to saint tiger225
quote:
Imagine stealing $19 billion. Sheesh!
Incredible! and to put it into one's mind, that equals to $19,000 millions. Crazy.
Posted on 1/16/23 at 1:57 pm to JoeHackett
quote:
They knew that everyone on the 19th floor were typical finance guys. Well educated, connected types. Downstairs however are less educated people with absolutely no background in finance. That had to raise major red flags for them.
At the time, a lot of Wall Street firms had similar arrangement. A high school graduate/college dropout with decent connections could get an entry level gig inputting trades in a boiler room type setting. It was the wall street equivalent of janitorial staff. These days, it takes a Masters to get an interview.
Now, the half dozen people supervising them? They damn well knew trades weren't being made.
Posted on 1/16/23 at 1:58 pm to idlewatcher
quote:
Didn't she get to continue living in their high end apartment even after he was convicted?
Not according to the documentary. The FBI ceased everything including her real estate and put it in receivership.
Posted on 1/16/23 at 2:22 pm to Basura Blanco
quote:
At the time, a lot of Wall Street firms had similar arrangement. A high school graduate/college dropout with decent connections could get an entry level gig inputting trades in a boiler room type setting. It was the wall street equivalent of janitorial staff. These days, it takes a Masters to get an interview.
I could be wrong but it's always been my understanding that the 17th floor didn't really have supervisors. It was a skeleton crew that had very few ties to finance. They weren't connected, educated or experienced.
To me Madoff's sons had to have known he was managing billions, his 17th floor didn't have anywhere close to the staff required to do that job and their dad was super shady whenever the 17th floor was brought up. There's no way they didn't suspect real fraud was occurring.
Posted on 1/16/23 at 2:39 pm to saint tiger225
quote:
Imagine stealing $19 billion. Sheesh!
I don't think he did. As I understand things, he just exaggerated how successful his trading was.
Imagine getting 401-K statements that say a mutual fund you own is earning 10-12% returns ever year, without fail. Your balance goes up pretty rapidly. Then one day, you find out the fund was actually earning much more realistic returns- say 4-5% averaged over time. Your balance is going to suddenly go way down, but it's not like that money was stolen or ever existed anywhere.
The one big complication is that some smart people got out before the big reveal, so the impact of the fraud ended up being somewhat disproportionate. You could argue that the people who stayed in were easy marks due to greed, I guess. IDK.
Posted on 1/16/23 at 2:42 pm to Gee Grenouille
I'm sure they enjoyed the money, and as long as that flowed I doubt they cared. People of that ilk just expect to have money and don't know a world without it.
This post was edited on 1/16/23 at 3:16 pm
Posted on 1/16/23 at 2:44 pm to Gee Grenouille
I can believe they didnt know.
My wife dosent know much about my cases because the last thing I want to do when I get home or when I'm on vacation is talk to her about work.
She just knows the checks keep getting deposited
My wife dosent know much about my cases because the last thing I want to do when I get home or when I'm on vacation is talk to her about work.
She just knows the checks keep getting deposited
Posted on 1/16/23 at 2:47 pm to USMEagles
quote:
I don't think he did. As I understand things, he just exaggerated how successful his trading was.
Imagine getting 401-K statements that say a mutual fund you own is earning 10-12% returns ever year, without fail. Your balance goes up pretty rapidly. Then one day, you find out the fund was actually earning much more realistic returns- say 4-5% averaged over time. Your balance is going to suddenly go way down, but it's not like that money was stolen or ever existed anywhere
For almost the entirety of the fraud (decades), Madoff never traded a single security. It was 100% a Ponzi scheme that only imploded because of the 2008 market crash where he could no longer cover his withdrawal requests.
Posted on 1/16/23 at 2:50 pm to Dire Wolf
What was sad is that a lot of Jews were taken. If you look at his victims a lot of them were Jews not in New York, but all over the country. The thing is that what made Bernie especially awful is that he more easily conned his fellow Jews since he knew that other Jews would trust him more.
This happens across all ethnic groups. In the early days of the mafia the first victims of extortion and numbers and loan-sharking were fellow Italians. The Russian mob hurts their fellow Russians more than non-Russians in the US.
This happens across all ethnic groups. In the early days of the mafia the first victims of extortion and numbers and loan-sharking were fellow Italians. The Russian mob hurts their fellow Russians more than non-Russians in the US.
Posted on 1/16/23 at 3:04 pm to SoonerK
quote:
For almost the entirety of the fraud (decades), Madoff never traded a single security. It was 100% a Ponzi scheme that only imploded because of the 2008 market crash where he could no longer cover his withdrawal requests.
"Almost the entirety" is debatable. People were giving him money to invest from at least the early 1970s until 2009. Bernie says he gave up on actually trading with this money in the early 1990s.
In any case, I never said what Madoff did wasn't a Ponzi scheme. Of course it was. I do think the popular understanding of what he actually did is a little bit off. Seems to me he was a big talker and shite just snowballed on him.
Posted on 1/16/23 at 3:13 pm to USMEagles
quote:
Bernie says he gave up on actually trading with this money in the early 1990s.
He should have started a Real Estate Investment Trust with all that money. He could have rode that wave from the 1990s to 2008. At least when the financial crisis hits in 2008 he could have walked away clean albeit with a lot of losses. Heck, he may even qualified for a bailout.
Posted on 1/16/23 at 3:14 pm to USMEagles
quote:
I don't think he did. As I understand things, he just exaggerated how successful his trading was.
By his own admission he didn't make a single trade the last 15 years of the wealth management firms existence and the Feds doubt he ever made even one trade. The firm took in $19 Billion of real money from investors and showed $60 Billion on fake books.
He would send out "statements" to investors showing the trades he made on their behalf at what price and what profit. His investors even questioned him on why the statements arrived so late each month. Looking back, it was obvious that he would generate these fake statements each month only after he knew the results of a stocks performance. And his idiot investors would stick their heads in the sand and brag to their friends about their gains each month.
He did have a fairly successful brokerage business part of the company that was legit but had nothing to do with the ponzi scheme and fake statements.
Posted on 1/16/23 at 3:38 pm to Gee Grenouille
Just imagine what market makers are scheming today.
Posted on 1/16/23 at 3:48 pm to GumboPot
quote:
Not according to the documentary. The FBI ceased everything including her real estate and put it in receivership.
If I recall the documentary correctly, she walked away with $1-2mm.
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