Madoff Might Not Have Made Any Trades

Boston Globe ^ | 1/15/09 | Beth Healy

[SJackson]

This thing got fishy to me the minute I heard that the sons "turned him in". Whether they were directly involved with the fraud, or just knew about it, or just should have known about it is immaterial.

The sons ran the broker dealer. If he wasn't trading through them at all, they had to know. If the level of trades wasn't commensurate with his assets, they must have suspected. It's impossible to believe they never solicited their fathers business, or that he directed all of it elsewhere.

[cynwoody]

I'm starting a new fund, It is called the green stamp premium fund. You give me your money and I will give you green stamps.

S&H Green Stamps were an early, cash-based rewards program. Since outclassed by the likes of the Citi Platinum Rewards Card.

[muawiyah]

I believe the analysis was done against an offer from one of Madoff's conies at the time.

When everything is over and done I think we will see a remarkably sparse papertrail, and certainly no audit trail at all.

[steve86]

Before this wave of redemptions Madoff was doing great because his “investors” rarely took money out. They plowed their dividends back in because it was such a great deal growing 12% each year ...on paper

Yes, but "on paper" had a different meaning here than it normally does. At least with Fidelity Investments, say, the portfolio is really worth what the paper statement says at that point in time (I hope).

[steve86]

If $50 Billion is missing, where did it go? Who has it?

As has been stated a thousand times on this forum alone, in a Ponzi scheme the deposits of the more recent investors are used to service the redemption requests of the earlier investors, as long as the requests don't get too large. In this scheme, the system began to break down probably about the time the equity bear market started in the fourth quarter of 2007, as investor's needs for cash increased. Redemption demands increased throughout 2008 until Bernie finally let the cat out of the bag. It is possible Bernie was siphoning off a percentage all along into a nameless account somewhere. Some of the proceeds paid to early investors will have to be returned (to later investors).

[dennisw]

Right..... On paper means two different things here.

But for sure, all the Madoff investors had were “paper profits”

[is_is]

"How can you bail out some companies and people, but not others? Where is the consistency?"

we shouldn't!!!......we (the government) should not be bailing out ANYONE!!! there isn't enough money to bail everybody out, so the corrupt bail out their friends at our expense.....it will be this way until we take back our country!!!! at some point we (the people as a whole) have to take responsibility for what we have allowed to happen to our country/government.

[bronxboy]

Quite true...he must have very slick or the SEC was simply in his pocket.

[hunter112]

The sons ran the broker dealer.

I didn't know that, interesting. Yes, do a little ball-busting on them while we're at it. Then stick their sorry butts in project housing.

[bruinbirdman]

"He felt no guilt because, as it turned out, they were greedy and knew doggone well no one can guarantee a 15% return year in and year out."

The up front warning of most any hedge fund: you have to be worth $10 million, minimun buy in $1 million, no guarantees, you have to be able to afford losing everything.

yitbos

[GOPJ]

...if Bernie Madoff was not making trades there were never any trading irregularities for the SEC to investigate!

Looks that way! LOL