Bernie Madoff of Ponzi Scheme Infamy Has Died in Federal Prison
Source: Bloomberg
New York (AP) -- Bernie Madoff, the financier who pleaded guilty to orchestrating the largest Ponzi scheme in history, died in a federal prison early Wednesday, a person familiar with the matter told The Associated Press.
Madoff died at the Federal Medical Center in Butner, North Carolina, apparently from natural causes, the person said. The person was not authorized to speak publicly and spoke to the AP on the condition of anonymity.
Read more: https://www.bloomberg.com/news/articles/2021-04-14/ap-source-ponzi-schemer-bernie-madoff-dies-in-prison
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Lovie777
(22,422 posts)before left office.
What did he ever do for Trump?
Warpy
(114,527 posts)Madoff robbed the rich, not the poor, which is why he was sitting in prison instead of a Caribbean villa. A pardon from a rich guy was never going to happen.
mountain grammy
(28,863 posts)
KS Toronado
(23,506 posts)So he'll remind people what happens when you lie & cheat your way through life.
mountain grammy
(28,863 posts)
Hassin Bin Sober
(27,429 posts)Stealing from rich people gets you tossed in jail.
bucolic_frolic
(54,654 posts)If he had done what he said he was doing, he might have stood a chance at making it work. There are ETFs today that hedge assets and indexes and pay almost 1% a month. From what I remember reading Bernie just didn't look at the computer records, let his employees deep-six them, and went on promising great returns. And it was sold pyramid network marketing style. Word of mouth and lucky to have heard about it, they said before the fall.
BumRushDaShow
(167,784 posts)The irony of him was one of his early companies helped to create the tech eventually used by the NASDAQ. I remember following the case where they said his investors were regularly receiving what were essentially old tech dot-matrix-printouts of their supposed investment returns and few seemed to even bother reading them, let alone questioning them. 
Sibelius Fan
(24,795 posts)Both played one on TV or in the movies.
There were no investments nor return on the same with Madoff. It was a Ponzi scheme, pure and simple.
greenjar_01
(6,477 posts)But then I remembered Shane Falco.
jmowreader
(53,026 posts)Before Madoff decided to become a crook, he was an excellent and well-respected financier. The Ponzi wouldn't have pulled in a cent if anyone else would have tried it, because of the nature of the thing.
This is Harry Markopoulos' analysis of Madoff's Ponzi:
https://math.nyu.edu/faculty/avellane/madoffmarkopoulos.pdf
This is what Madoff claims to have done:
He first bought a "basket" of 30 to 35 large-cap stocks. Next, he sold out-of-the-money S&P 500 index call options against the value of the stock basket. Then he bought out-of-the-money S&P 500 index put options to protect the investment. Madoff claimed this would return 12 percent to the investors, which means it was returning 16 percent to him because no one runs hedge funds out of the goodness of their hearts. He also claimed it only lost a little money in four months of its existence, which is strange because there were several crashes in the market while Madoff was running this.
Markopoulos believes Madoff would have needed to earn 20 percent just on his stock selections to make this work, which is the first and biggest problem here: large-cap or "blue chip" stocks do not throw off 20 percent profit per year. They are extremely stable. You can get...oh, two to three percent out of them. If you build your portfolio around the Pink Sheets (penny stocks and foreign companies...both BASF and Bayer trade on the Pinks, and those are exceptionally stable companies - but since they're headquartered in Germany, they have to be traded OTC) you can make 20 percent...but you can ALSO lose 100 percent, and no one is going to throw ten million dollars at you to invest in penny stocks.
Markopoulos points out another huge problem, which is that there aren't enough call and put options in existence to do what Madoff said he was doing. He also points out that Madoff's counterparties are a little weird - Madoff claimed to trade derivatives exclusively through the Union Bank of Switzerland and Merrill Lynch, but the two biggest firms in the derivatives he claimed to use, which he would need to move the amount of derivatives he was supposedly moving, were Goldman, Sachs and Citigroup.
But seriously, the only way this shit would have sold is if a financial titan like Madoff said it worked.
Sibelius Fan
(24,795 posts)jmowreader
(53,026 posts)
But that is the inherit problem, people trust their financial advisors...and they let their greed cloud the mind at times. It's only a matter of time a scam artist figures out to find them. Madoff was a criminal, but just like bank robbers who frequently return to the same bank to rob, they get caught. Since they didn't get found out the first time, get sloppy over time and screw up.
Shit, when the market tanked due to COVID, everyone was saying sell Disney, Sea World, Carnival, etc. I laughed and with the very little play money I had, bought into it all. Nearly doubled it with my target sell, and I'm lucky to have a bit of play money.
I travel a lot and meet a lot of people. Once they hear about my background, often strike up conversations on the market. Usually tell them if you are willing to lose your ass, yes, go ahead and invest in the options market. But don't be surprised when you lose your ass. Stocks...take a look at a CD at the bank, if you think you can do better and have the acumen to do so, go for it. But this should not be your life savings, keep that in the 401k, Pension, etc.
The majority do not have that kind of acumen. Which is why the idea of privatizing social security is a really fucking bad idea. Funny, some have actually asked me to be their advisor. Told them, hell no. If I lost their kids college money, their retirement fund, etc. It would weigh on me.
In the case of Madoff, obviously not at all.
jmowreader
(53,026 posts)Stocks will potentially give you better return, but they’re too damn much work for me to deal with.
MrModerate
(9,753 posts)Who shall we put on the list to fill that spot?
BradAllison
(1,879 posts)
murielm99
(32,863 posts)
niyad
(130,976 posts)
global1
(26,506 posts)greenjar_01
(6,477 posts)ZonkerHarris
(25,577 posts)
Ford_Prefect
(8,554 posts)
mysteryowl
(8,988 posts)
DinahMoeHum
(23,487 posts)
eppur_se_muova
(41,486 posts)
Major Nikon
(36,925 posts)
NurseJackie
(42,862 posts)tenderfoot
(8,982 posts)Trump steals from regular people - hence never being held accountable.
politruk
(88 posts)the number of the Swiss or Cayman Islands account where he stashed his loot?
Raine
(31,133 posts)
BigmanPigman
(54,885 posts)on How It Really Happened. No matter how much I think I understand about this complex case I am still amazed over how he got away with it for so long.
brush
(61,033 posts)investment opportunities.