Click Here To Purchase The Wizard of Lies

Author: Diana B. Henriques

Publisher: Times Books (Henry Holt Company)

ISBN: 978-0-8050-9134-2


The field of narratives about Bernard (Bernie) L. Madoff during the past few years is quite crowded with a number of books and articles examining varying aspects of his devious Ponzi crime. However, I would be very hard- pressed to find another book that is as meticulous, insightful and comprehensive as Diana B. Henriques's The Wizard of Lies: Bernie Madoff And The Death Of Trust.

What Henriques has brought to the table is a layered account of an individual whom she fittingly describes as someone who is not “inhumanly monstrous” but rather someone who is “monstrously human.” As she most perceptively explains: “He was greedy for money and praise, arrogantly sure of his own capacity to be able to pull it off, smugly dismissive of skeptics-just like anyone who mortgaged the house to invest in tech stocks, or tapped the off-limits college fund to gamble on a new business, or put all the retirement savings into a hedge fund they didn't understand, or cheated a little on the tax return or the expense account of the spouse. Sound familiar?

And her final sage words of the book brilliantly wraps it all up when she states that the most enduring lesson of the Madoff scandal is: “In a world full of lies, the most dangerous are those we tell ourselves.” In this case it is the lies Madoff told himself and those of the investors who likewise fooled themselves. For Madoff, he sustained his belief of infallibility by convincing himself that he could get away with his Ponzi crime, while his investors ignored the fact that he really didn't have any investment earnings to pay his clients. They turned a blind eye to the reality that his investment acumen was increasingly implausible and that his operations lacked transparency. Furthermore, they simply ignored or dismissed the rumblings that were prevalent among certain hedge fund managers that Madoff's returns were too consistently good to be credible.

Moving at a brisk pace, Henriques packs in many intriguing facets concerning Bernie Madoff including how he was able to successfully create the aura of a genius investment manager- one that was the most exclusive that never failed to deliver the returns his investors expected of him, that is, until the party was over and the music stopped. After all, didn't he bring them along profitably through bad and good times beginning with the tumble of the stock market in 1962, the doldrums of the 1970s, the 1987 crash and its rocky aftermath? However, no one knew or suspected that he was borrowing money from one of his very wealthy clients to replenish the accounts of others in his early years, and moreover, no one was aware that he was squeezed by a rash of withdrawals in the late 1980s.

Henriques also sheds some very interesting light concerning Madoff's family background, where he grew up, how he started in the investment business, who initially gave him his first break, when did he start his Ponzi scheme, who were his early investors and did they ever suspect that he was running a Ponzi scheme, who knew about it and who should have known about his shenanigans, how was he able to attract thousands of rich and powerful investors including lawyers, accountants, European boutique banks, offshore hedge funds, wealthy European families, Hollywood celebrities, charitable organizations, endowments, educational institutions, several foundations and investment committees that all came to trust Madoff with their vasts sums of money. In addition, Henriques exposes his feeder funds and how much was he paying them as finders' fees, were any of his family members involved in the crime, the incompetency of the SEC, what kind of life did he live after he had accumulated considerable wealth, and how was he able to convince some very sophisticated investors that his investment strategy was based on something he described as a “split-strike conversion” that managed to grow endlessly large.

In this short review it is very difficult to convey all of the gripping lowdown Henriques shares with us, however, there is no doubt that with every page you will feel, as I have, a new clarity about how Madoff was able to pull off his Ponzi scheme for so many years and rightfully earn Henrique's title of him: “The Wizard Of Lies.”

Diane B. Henriques is the author of The White Sharks of Wall Street and Fidelity's World. She is a senior financial writer for The New York Times. Henriques is a Polk Award winner and Pulitzer Prize finalist and she has won several awards for her work on the Times's coverage of the Madoff scandal and was part of the team recognized as a Pulitzer finalist for its coverage of the financial crisis of 2008.


Click Here To Purchase The Wizard of Lies