"For Madoff investors, big returns trumped concerns" follows up the bombshell revelation on Friday that Bernard L. Madoff, a NASDAQ poobah and crony of wealthy investors, had his Ponzi scheme which evaporated $50 billion worth of wealth, trumpeted for the world to not see.
One has to ask where the SEC and other authorities were when this piece of excrement was systematically robbing people. Will he get a country club prison term or will he get the hard time he deserves - more than some small time criminal who wrote bad checks.
"17 floor where wealth went to vanish" from the NY Times
"Questions are raised in trader's massive fraud" from the NY Times
"For investors, trust lost and money, too" from the NY Times
"Fund fraud hits big names" from Wall Street Journal
Some major investment funds that placed money with Madoff included the Wilpon family's Sterling Equities, which released a statement Friday expressing shock at the turn of events.
"Like all investors, we will continue to monitor the situation," it said. The firm did not disclose how much it had invested.
Other funds that announced investments in Bernard L. Madoff Investment Securities included Fairfield Greenwich Group, Bramdean Alternatives Limited and Pioneer Alternative Investments.
And yet there had been warning bells for years about Madoff's company.
Jake Walthour, a principal at the hedge fund consulting firm Aksia LLC, said his firm was hired to investigate Madoff's business dealings by a potential investor several years ago.
The probe raised several red flags, he said. Madoff's returns were "abnormally smooth" from month to month and had none of the volatility usually associated with stock investments. It seemed impossible to replicate his investment strategy or verify his track record.
Madoff claimed to be moving as much as $13 billion in and out of the market every month but "no one on the street could verify it or even see his footprints," Walthour said. "That organization was incredibly secretive."
He only issued simple paper reports to investors, not detailed electronic data streams that indicate how those investments are doing. There were few if any outsiders involved in his business. His auditor was a tiny accounting firm in Rockland County that no one had ever heard of before.
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