How do you “lose” $50Bn? I can’t just evaporate? Or can it?
You make losing trades, and meanwhile you pay dividends to old investors from capital given to you by new investors.
His trades need to be audited. One good way to launder money is to engage in trading with an overseas counter-party, where you take over his bad investments (at above true market value) in exchange for him putting money into overseas accounts for you.
You take the cash infusions from new investors to give great returns to old investors who want redemptions and word spreads how well you are doing and the money keeps coming in until the obligations outpace the new cash coming in ....which is more likely in a downturn like we are in where folks are sitting on their cash.....or if the manager has been stealing too much.
We had a similar thing here in Nashville with only around 100 million and the perp eventually blew his head off. He had been known as a big philanthropist around here till then with his subterfuge.
Sorry to see the usual class envy/conspiracy/whatever on FR like these folks deserved to be fleeced.
Someone sets up an investments shoppe and one has reasonable expectations they will not lose all of your money....at least not through fraud....bad investments is more understandable.