Thoughts & Opinions

It is great to be up and around again. The last month was a little rough with my back problems.

During the time that I was sidelined, I watch with great interest the entire Bernard Madoff situation.I researched everything I could find on the Internet about him and how he operated his scam. I, also, researched as many of the investors as I could find.

Receiving a jail sentence of 150 years was a little over the top but I understand the message the judge was sending out to the investment community. I believe as most people do that Madoff didn’t operate the scheme on his own. I believe that the government’s job is not over and there are many more people who need to be prosecuted. The one person who really makes me sick is his wife. Now, who believes that she had no knowledge of what her husband was doing all those years?

The  knowledge I gained from my research strengthen my belief that the investors are also to blame for the success of Madoff’s scam. The common thread through all of this is: greed.

Anyone who was able to acquire the amounts of money that they invested with Madoff knew that there was no legal way to earn the returns that they received over the years from Madoff. It was no different then taking a million dollars to Las Vegas and sitting down at the Black Jack table. You bet the entire million over and over again and each time you win. Then after hours of winning you finally lose. Now the reality of the situation sets in and right behind it the anger and sadness. But who do you have to blame? Get my point?

These investors are trying every which way to get their money back but could you get your money back from the casino? They knew what they were doing from day one. Okay, you say, “But people even committed suicide” Yes, and many people committed suicide each year after losing their entire wealth gambling. Really, where is there any real difference.

Here is a section of a news article from the Jackson Sun newspaper that echoes some of my feelings on this tragic situation:

Madoff gets justice, investors a lesson

June 30, 2009

Wall Street swindler Bernie Madoff got the jail sentence he deserved. Federal Judge Denny Chin sentenced Madoff to 150 years in prison calling his crime an “extraordinarily evil” one that devastated the financial lives of thousands of people.

Since the early 1990s, Madoff ran an investment pyramid scheme that bilked individual investors, charities and even sophisticated institutional investors. The fraud is estimated to be between $13 billion and $65 billion. Madoff told his sons, who are said to be innocent partners in his investment business, he estimated the fraud to be at least $50 billion.

Since parole is not allowed in federal prison, Madoff will have to serve the entire sentence, effectively sending the 71-year-old swindler to die in prison.

Madoff attracted investors by consistently giving them above average returns, even when markets were down. He appeared to have a Midas touch system of picking investments, which he kept a closely guarded secret. Now we know why. It is unlikely that bilked investors will receive compensation, even after Madoff’s confiscated assets are sold.

There is an age-old lesson in the Madoff scandal. If something seems too good to be true, it probably is. Investors shoulder some of the burden for the loss. Most were attracted by profits that could not be obtained elsewhere. Many chose to believe Madoff’s bogus account statements rather than question returns too good to be true.

Nevertheless, thousands lost substantial amounts of money, many their entire life savings and financial security. Madoff did face devastated investors who testified at his sentencing hearing, and he did apologize to them. But that cannot replace lives spent working, saving and building for a secure financial future that have been stolen because of one man’s greed.

It is easy to rail against government regulation of private business transactions such as investment companies. They are a burden. But when fraud and deception drive thousands of investors and hard-working people to financial despair, you have to ask which burden is the greatest.

What is the old saying, “If it looks too good to be true  then it probably isn’t.”

Technorati Tags: Bernard Madoff, Federal Judge Denny Chin, Investment Pyramind Scheme, Las Vegas, Ponzi Scheme