Saturday, 30 August 2014
Last updated 1 day ago
Feb 16 2011 | 7:48am ET
Even Bernie Madoff thinks some of the banks and hedge funds he dealt with should have raised more red flags about his operations.
Madoff, speaking publicly for the first time since his arrest in December 2008, told a New York Times reporter that certain (unnamed) banks and hedge funds were “complicit” in his $65 billion Ponzi scheme.
During a two-hour interview in the Butner, N.C. prison where he is serving a 150-year sentence and in an exchange of emails, Madoff used the term “willful blindness” to describe the attitude of certain banks and hedge funds to the discrepancies between his regulatory filings and other information available to them.
“They had to know,” Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’”
Madoff also claimed to have provided information to Irving Picard, the trustee trying to recover assets for fraud victims. He said he met with Picard’s team last summer. He also said he provided information to help in the recovery of assets, but “refused to help provide them with criminal evidence.”
Discussing some of the out-of-court settlements negotiated by banks and funds with private Madoff investors over the past two years, he said some were made “to keep me quiet” about the role played by the institutions and the identities of the owners of some of their private accounts.
There is, of course, the question of whether or not Madoff can be believed (in fact, the reporter in question is writing a book about the case entitled, “The Wizard of Lies: Bernie Madoff and the Death of Trust”). Madoff himself acknowledged that he’d be of little use in court where any defense lawyer could simply brand him a liar.
While acknowledging his guilt, Madoff focused on the big investors and institutions he dealt with, not the thousands of smaller investors.
To date, no bank or hedge fund that did business with Madoff has been accused of knowingly investing in a fraudulent scheme. Picard’s civil lawsuits, however, assert some bank executives were suspicious for years, yet continued to do business with Madoff.
This seemed to bemuse Madoff himself. He said he was surprised by the emails, emerging now in lawsuits, that show bankers were worried about his scheme before it blew up:
“I’m reading more now about how suspicious they were than I ever realized at the time,” he said.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...