Lies, betrayal and enormous amounts of money: Theresa Cummins examines the story of Bernard Madoff.
THE BERNARD MADOFF CASE made the news again recently after a US hedge fund, Fairfield Greenwich was charged with fraud after placing nearly $7 billion of its clients’ money into Madoff’s fraudulent investment scheme without proper checks on the nature of the investment activities.
This hedge fund is among the first of the ‘feeder funds’ that pumped billions of dollars to fund Madoff’s corrupt investment system to be charged with fraud. The fund involved in the scandal is run by Walter Noel, a Connecticut high-profile socialite who allegedly acted as a mediator for Madoff since 1989, a reverse modern day financial savvy Robin Hood, robbing from the middle to upper classes and giving to the uber-rich Madoff.
Through a 1 per cent commission from the transactions, Fairfield Greenwich earned a handsome $100 million a year. The fund is accused of lying to its investors, pretending it had comprehensive access to Madoff’s accounts. In a statement Fairfield Greenwich denied the allegations, stressing that the claims were “false and misleading.”
It also pointed out it wasn’t the sole casualty of the fraud, with the Securities and Exchange Commission and hundreds of investors falling victim to the international fraudster.
“Madoff’s targets varied from members of the US Jewish community to celebrities such as Steven Spielberg and Harry Potter actor Daniel Radcliffe”
As the quote from the 1980s cinematic depiction of the financial world, Wall Street goes, “greed, for want of a better word, is good”, this mantra has leaked from the big screen out into the real world leaving a trial of destruction and financial ruin for some in its path.
$65 billion fraud, moral and financial corruption, and the greatest conman this century has ever seen, it was the stuff of Oscar-winning films. But sadly for the case of hundreds of enraged investors there was nothing imaginary or award-winning about it. Madoff’s targets varied from members of the US Jewish community to charities and well known celebrities such as Steven Spielberg and Harry Potter actor Daniel Radcliffe.
The 70-year-old, who faces a sentence of up to 150 years, deceived and exploited the trust of the investors and used the money to finance his lavish lifestyle that included four homes, six boats, four cars, and a host of extravagant assets such as a $39,000 piano and $65,000 worth of silverware.
This mass deception of investors and extensive corruption has stretched to our shores with a number of funds listed on the Irish Stock Exchange badly scarred from losses caused by the $65 billion Madoff fraud. Two such funds linked to this reportedly gave money to the Irish leg of HSBC, which in turn gave the money to Bernard Madoff to invest.
The fraudster, who admitted that no authentic investments had been made on behalf of the investors in over two decades, had assets of more than $100 million in assets seized by US prosecutors in an effort to repay deceived investors.
While the leaders of the G20 countries met to discuss possible solutions to alleviate the financial crisis, tighter regulation is once again suggested as the panacea to impede the spread of corruption and fraud in the financial sector. However, this case is intrinsically a matter of ethics and moral conscience, something which cannot be enforced.