Who is Bernie Madoff?

Over the last several days, you’ve probably been hearing about Bernard Madoff and how he has allegedly stolen billions of dollars from individuals over the last several decades.

You are probably asking yourself how this could have happened. What is the real story of Bernie Madoff? How could an intelligent person invest their hard earned dollars and not know what they were getting into?  How could that same person not know what was going on with their money over years and years and years?

I ask myself a different question – or maybe the same question, but from a different perspective.

I wonder if an investor could haveavoided the problem entirely.

“Wait a minute” you exclaim “Madoff is the one accused of fraud, not the investors.  He’s got to deal with the issue of character defects!”

I’m not trying to say that Mr. Madoff has no spiritual work to do.  From what I’ve been reading….  he has a great deal of that work to do and he’ll probably have plenty of time to do it.  But I’m not writing for him.  I’m writing for the victims and I’m writing for you to make sure you don’t become a future victim of some scoundrel.

So consider the question again.  What character defects could the investors have dealt with in order to prevent this financial tragedy?

I can’t say for sure because I don’t know any of the investors personally but I can speculate that it would be worthwhile to look at greed and sloth – working at the same time.

I haven’t seen all the details yet but my understanding is that Mr. Madoff reported great returns year after year regardless of what the market did.  A lazy person might just consider that and make an investment decision.  A lazy person might not take the time to understand how investments work and thereby know that such results are not possible.  A lazy person might not get a second opinion.   Obviously, the heady returns that Mr. Madoff supposedly reported fed the greed which fed the laziness.  It all works together.

I wonder where all these investors’ CPA’s were too.  This is especially troubling.  Again, I don’t know all the facts but I can guess that these clients were not getting third-party statements confirming the existence of the investments.  For example, you may have a lousy broker, but at least your investment is for real.  You know this because you get monthly statements from either the brokerage house or the custodian (Schwab, Fidelity, TD Ameritrade, etc…)

Since the allegation is that these accounts actually never existed, my guess is that the clients and their CPA’s never got statements from the third party custodian.   Again, the greed fed the sloth and that led to the result.  I hope that you are not a victim of this alleged fraud or any other fraud.  I know if you do your work, the odds of this happening to you in the future will be reduced significantly.

Bookmark It

No related posts.