Bernard Madoff – 2009-01-26

I have to admit I am fascinated by the Bernard Madoff story.

This guy was so good at being bad. Not only is he --- allegedly mind you --- the biggest thief in history, he did it without a weapon and he got away with it for decades.

He may also have single-handedly done what Lehman Bros, Citicorp and Goldman, Sachs could not do - convince the public and hopefully the Congress that the U.S. securities rules and its regulators are a massive failure in safeguarding investors. The illusory marketplace that is the securities market, and especially hedge and derivative funds, is so complicated as to be beyond the scope of comprehension and oversight by SEC regulators.

Everyone should read Harry Markopolos’s letter to the SEC sent in 2005. I said 2005. According to this letter Mr. Markopolos first approached the SEC about Bernard Madoff back in 1999. He told the SEC that Madoff’s returns to investors were so high (an average16% a year –before fees) as to be impossible.

His analysis of the Madoff scheme is really a brilliant application of deductive reasoning – and it turned out to be right on. And his concluding section entitled: "Potential Fallout if Bernie Maddoff Turns out to be a Ponzi Scheme" - is scarily accurate. Yet the SEC was unable to find anything wrong over all these years.

Remember the Leonardo Di Caprio movie "Catch Me If You Can" and the old Tony Curtis movie "The Great Impostor" well this guy Madoff, makes them look like petty con artists. I’m thinking the Bernie Madoff Story is already being turned into a movie script and Tom Cruise and Brad Pitt will be vying for the part.

I suspect it will be produced and directed by Stephen Speilberg because that is the only chance he has of recouping any of the money he invested with Madoff.