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Former NASDAQ director arrested

2008-12-12 00:47:33.344328+00 by Dan Lyke 13 comments

Former NASDAQ chair Bernard L. Madoff was arrested on a securities fraud charge Thursday for running "basically, a giant Ponzi scheme." (his words, apparently). Oddly, the charges apparently have nothing to do with his experiences at NASDAQ, though you'd think that'd be prosecutable, but with a private investment advising business that, according to this article, had $17.1 billion in assets under investment, but somehow he'd managed to blow through at least $50 billion, and on Wednesday he fessed up to his employees.

I've been wondering recently about how people fall for scam artists like this, why they seem to take the symbol, the suit, the tie, the smile and the firm handshake, over the obvious notion that, hey, the guy's a stockbroker, of course he's out to screw you over hard.

I was recently talking with a guy who, being Mormon, has put a lot of effort into having 2 years of food put by. We talked for a bit, and came to the conclusion that 2 years without food is probably a 500 year event, so eight or ten generations could come and go with that being a basic economic drain on a culture, but if you need it, then that's the culture that'll survive longer term. Maybe stockbrokering is that same thing in reverse, if it's 80 years between systemic collapses (and it didn't used to be, in the 1800s this was every 15 years or so), you can hope that your generation is the one that doesn't lose in the Ponzi scheme...

[ related topics: moron Sociology Economics ]

comments in ascending chronological order (reverse):

#Comment Re: made: 2008-12-12 01:27:47.290157+00 by: Dan Lyke

And it further occurs to me that perhaps this is something like the Nigerian scam writ large: If you're an honest person, the 419 pitches don't appeal, and so you won't get taken. Maybe publicly traded companies and "investment advisors" are playing that same game.

#Comment Re: made: 2008-12-12 02:26:26.321684+00 by: ebradway

From a recent episode of Chuck: "The bigger the lie, the easier to pass it off."

It's like cold fusion - if people want it bad enough, they'll swallow any sense of reality. I just got an email from BMW saying that I won $1,000,000. All I had to do was email some yahoo.com address for more information. I didn't know BMW used Yahoo for email - but I've already spent the $1,000,000! ;)

#Comment Re: made: 2008-12-12 11:26:55.213445+00 by: ziffle

"I've been wondering recently about how people fall for scam artists like this"

Reminds me of people who vote for Obama or who want to disregard our constitution... it will come back to haunt us.

#Comment Re: made: 2008-12-12 13:46:36.627993+00 by: meuon [edit history]

50-17 billion = 33 Billion. Even figuring a lot went out as "Investment returns" that's a -lot- of money.

#Comment Re: made: 2008-12-12 14:13:51.5639+00 by: Dan Lyke

So this leads to a question: Are all his employees now to be charged with receipt of stolen property, since presumably they were paid their salaries from the proceeds of the Ponzi scheme?

#Comment Re: made: 2008-12-12 15:51:58.731934+00 by: Dan Lyke

To Ziffle's point, hey, the guy's a politician, of course he's out to screw you hard. Like stockbrokers, we're just talking about degrees of evil.

#Comment Re: made: 2008-12-13 14:02:08.67084+00 by: meuon

Ever wonder if $ANTIDIETY were to run for office, it'd just win by default?

#Comment Re: made: 2008-12-13 14:56:42.08695+00 by: Dan Lyke

I think that happened in '00 and '04. Remains to be seen in '08, but at least this time there's some question about it...

#Comment Re: made: 2008-12-13 15:28:31.473861+00 by: Dan Lyke

"I knew Bernie Madoff was cheating, that's why I invested in him", only the cheating the investors thought was happening wasn't. This MeFi comment says it best:

We may have reached Peak Schadenfreude.

#Comment Re: made: 2008-12-13 22:18:25.225812+00 by: meuon

"W" wasn't/isn't the $ANTIDIETY, just an incompetent delusional minion.

#Comment Re: made: 2008-12-13 22:51:33.005712+00 by: Dan Lyke

Yeah, but I think an argument can be made for Cheney in that direction.

#Comment Re: made: 2008-12-14 03:40:40.915848+00 by: Larry Burton [edit history]

I use to think that too until the hunting incident.

#Comment Re: made: 2008-12-15 20:28:25.586128+00 by: andylyke [edit history]

Supposedly these unregulated "hedge funds" are intended only for the incredibly sophisticated investor. I hope to G*D that we taxpayers don't wind up baling these investors out. Every news story I've heard on this thing quotes somebody as saying that "we all knew these were unattainable gains".

and on the other side of it, there are repeated references to retirement funds and the like who invested with this crook. Those fund "fiduciaries" should be strung up by the nuts for risking other peoples' money.

Somebody's got to say it - Bernie apparently Madoff with a lot of money.