Review: Catastrophe: The Story of Bernard L. Madoff, The Man Who Swindled the World
Norm Goldman, B.A. LL.L, is the
Publisher & Editor of Bookpleasures, which he created in 2002.' Practicing law for over 35 years enabled Norm to transfer and apply to
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Authors: Deborah and Gerald
Publishers: Phoenix Books, Inc.
ISBN: 13-978-1-59777-640-0: 10:-1-59777-640-8
If you are as curious as I am as to how Bernard Madoff pulled off the largest Ponzi scheme of all time, you have to read Deborah and Gerald Strober's Catastrophe: The Story of Bernard L. Madoff, The Man Who Swindled the World, however, one word of caution, one of the risks in writing a book pertaining to a criminal saga that is still unfolding is that before the ink is dry, some facts or speculations have become obsolete.
Conducting many telephone interviews over the Christmas and New Year holidays 2008-09 with individuals directly and indirectly connected to Bernard Madoff , whom are listed in Appendix 1 of the book, together with useful background information, the Strobers have attempted to piece together a fraud that was described by Andrew M. Calamari, associate director of enforcement in the SEC's New York office as a “stunning fraud that appears to be of epic proportions.”
The Strobers have endeavored to give us a birds-eye view of what makes Madoff tick, however, as they admit and as we learn, there are more questions than answers. They ask: how could he have pulled off such a fraud for so long? Is he mentally disturbed? Is he a sociopath? Is he completely rational, but totally amoral?
The book divides itself into four parts with nine interesting and important appendices. The first part delves into the confession and arrest, the victims that could wipe out a generation of Jewish wealth and the fact that the Jewish community is not the only one that is a victim. Part two informs us about who the Madoff family is and in particularly some background information of Bernard, where he grew up, where he went to school and some other tidbits. There is also a section concerning what his wife, sons and brother may know. Part Three concerns the absorbing the shock and dealing with the consequences where he hear from some of the victims, the anti-semitic vox populi, Part Four asks the question where do we go from here and what punishment would fit the crime.
Among the more perplexing issues brought to light are how some investment advisers informed their investors that they had carried out “extensive” due diligence and in one instance they had even boasted that it hired private investigators to run “extensive background checks” on Madoff's fund managers. What about the ones who turned over investors' monies to Madoff to manage without informing their investors and without divulging that they were receiving from Madoff annual fees of 1.5% of the monies turned over. Another is if the financial managers fulfilled their fiduciary responsibilities to their clients in monitoring and tracking Madoff's investments. The there is the matter of the investigations conducted by SEC, which incidentally numbered eight over a period of time, where it didn't seem to be able to uncover the fraud. How thorough were these investigations and how competent were the auditors? In addition, as the Strobers assert, what did the SEC know, and when did they know it? And as mentioned, the most striking example of the SEC's malfeasance regarding Madoff was its refusal to take seriously the claims of Harry Markopolos, a well-respected figure in the financial world, who for nine years tried to respond to his charge that Madoff was a fraud.
As for Madoff himself, you have to shake your head and wonder how from his vantage points of Mahattan, the Hamptons, and Palm Beach, he was able to observe his wealthy neighbours, join their exclusive clubs, establish their trust, and soon had them eating out of his hands to the extent that you had to beg to get him to take their money to invest. He even managed to preside over the board of his New York cooperative apartment building where he was privy to the financial status of prospective buyers. One interviewee hit the nail on the head when he described Madoff “as an incredibly shrewd man in understanding human psychology and human greed.” When some potential investors asked Madoff the secret of his investments, his patent reply was “it's a proprietary strategy. I can't go into detail.” Luckily for some this was not good enough and they avoided falling into the mess.
On March the 12th, 2009 Bernard Madoff pleaded guilty to eleven felony counts and his request to return to his luxury penthouse apartment was denied. Instead, Madoff was sent straight to prison where he now awaits sentencing. Incidentally, he did say he was “deeply sorry and ashamed.” It will probably be several years or perhaps never before we ever learn the true story behind the biggest Ponzi scheme in history. As for the ramifications of all of this, all I can say is that the lawyers will have a field day in trying to reclaim monies on behalf of their clients from all parties directly or indirectly involved with Madoff. In fact, as we are informed, given the need of many of Madoff's victims for tax relief, accountants, tax attorneys, and other financial industry experts should expect a dramatic increase in clients in the months and years ahead. As the old adage goes, one man's misfortune is another one's fortune.
a whole Catastrophe: The Story of Bernard L. Madoff, The Man Who
Swindled the World is a worthwhile read and although we receive a
limited behind-the-scenes look at the workings of Madoff, we are
still left with the impression that he couldn’t have acted alone.
The question is will the others who may have been involved in this
hideous crime be brought to justice?
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