Don't Be Scammed by Madoff Investor Sob Stories

[acmavm]

Matthew Rafat

<snip>

I am deeply concerned that taxpayer monies may be used to reimburse Bernie's rich investors more than the usual $500,000 SIPC coverage. Taxpayers are already paying Bernie's investors half a million dollars each. I fear that Congress will increase the cap of SIPC insurance, purportedly as a populist move (I can already hear the words, "For our protection")--and then make the increased limits retroactive. If that happens, taxpayers will be on the hook for even more money, all to be paid to sophisticated, rich investors.

Don't be scammed. Madoff's investors were doing fine before Madoff, and they are still better off than 99% of the American population today. If they convince you otherwise, perhaps they really do deserve to be called sophisticated investors--after all, if Madoff's rich investors are smart enough to get reimbursed for 100% of their losses when they knowingly invest in a less regulated fund, the American taxpayer is indeed unsophisticated.
<snip>
http://www.dailykos.com/story/2008/12/21/165935/67/439/675868

[Tansy_Gold]

1. ITA n/t

.

[peacetalksforall]

2. If any money is to be paid, it should go directly to the little people, but that is absurd

because the money paid comes from the little people.

DO NOT REIMBURSE THE WEALTHY WITH MORE MONEY. FINE ALL THE SEC, IRS, SOFTWARE COMPANIES AND INDIVIDUALS INCLUDING CONGRESSPEOPLE WHO FACILITATED THE CHANGES IN THE LAW THAT ALLOWED EVERYTHING TO GET STARTED and RUN SMOOTHLY for Madoff. Until now.

If the wealthy funds, companies, individuals got taken, let them eat at McDonalds.

There is absolutely no reason for the little people to pay them off.

What an utterly, utterly ridiculous idea. They are the ones that can get credit if they need it.

[acmavm]

3. Amazing, ain't it? I was dumbfounded as I waded through that thread that

we're gonna have to give all them bastards a half million buck apiece. How long before they get bailout bucks?

[The Backlash Cometh]

4. Is there any talk of a bailout?

I haven't heard one word in that regard. What I did read however, over and over again, was that it was a Ponzi scheme or hybrid Ponzi scheme and how that works is, that those who came out ahead because they were early investors, have to return as much of the money that's left to compensate those who lost the most.

[ozone_man]

6. $200B to be lent to hedge funds

that invested in subprime mortages, by the Fed acting in our best interest of course.

Amazing, isn't it? They rape the public going up, and coming back down. Win win. Too big to fail.

[The Backlash Cometh]

10. I don't think Madoff was involved in subprime mortgages.

In fact, he wasn't involved with much of anything except for stealing from Paul to pay Peter.

[pitohui]

13. that's because you have no right to receive stolen money even if you didn't know it was stolen

so yes in theory the "early" investors would have to return any money they received that was a product of fraud

in practice, in the case that caught up some of my friends some years ago, that i mentioned in my other post in this thread, the fbi did not try to recover the funds from the "early" investors, other than family members of the broker who perpetrated the fraud

this particular case is just to big to let it go, though, you're talking billions, yeah, the money has to be traced and recovered if possible

what a mess for all concerned

think about if you buy a painting or a gem, and later it's learned it was stolen -- you still have to return the item and you're out the money -- even if you didn't know when you bought it that it was stolen

same thing here

but i don't quite see how it can be otherwise

[Cessna Invesco Palin]

5. Sadly, no.

I don't understand it myself, but it does seem that a great many charitable organizations, educational institutions, and state pension funds invested in Madoff's swindle. I still haven't got an acceptable answer to why ostensibly conservative investors were playing with hedge funds, but let's not pretend that it's just a bunch of rich people getting fucked over (which is usually the case with hedge funds.)


Interesting story... My uncle sits on the board of directors for a small private university in the NYC metro area, and knew Madoff personally, and he's utterly shocked by these developments. At the same time, I have little sympathy for anybody who invested in a hedge fund based on their personal assessment of its leader.

[Frustratedlady]

7. What I don't understand is why Madoff isn't made to return the money.

It has to be somewhere. Did he pocket it, did he buy property, did he hide it in Swiss banks? You can't just lose that much money, so he has to be able to account for it. Strip him of his property and all assets until the people are paid back. Nobody is paying us for the high gas prices because of hedgers, the loss to our stocks and bonds, the low interest to our savings accounts. If Madoff's victims can belly up to the bar, then let the rest of us do the same.

[Vickers]

8. In a Ponzi scheme, the new money coming in is paid to the

previous investors. He skims off the top, but nowhere near $50B worth.

Everybody thinks they are getting great returns, but the principal is gone.

I do agree that he should lose everything he has.

[NashVegas]

15. At Least Some Of It Will Likely Be In Art Investments

Although I highly doubt it will be anywhere near even $1b.

The asshole who robbed my 401(k) blind - and others' - had some of it stashed away in rare Japanese block prints.

[LuckyLib]

14. In reporting on this scam, the term "hedge fund" almost never appears. Madoff took the burden

off a great deal of wealthy folks, foundations, and charitable organizations by "managing" their money. He was very closed mouthed (did not use electronic access to information for clients)and no doubt folks thought their money was being handled through combination funds that spread the risk over stocks, bonds, etc. Getting an annual rate of return at 10-12 percent, folks didn't feel a need to ask any questions. What's fascinating is how he and his henchmen -- acquaintances who themselves took a "management fee" of 1.5% (even though they sent the $$$ directly to Madoff) -- managed to convinced so many intelligent (and greedy) wealthy folks that they were gaining entry into a very exclusive club.

He's a sleaze of the highest order -- and 50 billion is no doubt the tip of the iceberg.

[Canuckistanian]

9. Some people turned over 100% of their investments to Madoff

He was very persuasive and influential in his social circle.

That said, in terms of investments, the "caveat emptor" law rules supreme.

They should seek reimbursement through legal channels, not the public purse.

[sarcasmo]

11. This Country only works for you if you are rich.

[pitohui]

12. it's my understanding the investors did not have sipc protection

hedge funds are not covered by the sipc, it doesn't sound like the sipc is going to be reimbursing any of these investors, rather, they are assisting in the investigation to see what money remains and what pro rata share the investors may be getting back, if anything

what am i missing?

do you think the gov't should not provide any assistance at all in tracking down the money and returning it to the victims?

i know some victims of a similar scam (not so large, of course) a few years back, busted by the fbi, the sipc did not provide any insurance coverage and the victims didn't receive back a penny -- the scamster himself committed suicide before the case when to trial -- the money was gone -- the sipc did NOT reimburse anyone

i think the sad stories coming out are coming out because the stories are sad...not because some charity once worth millions "might" get back $500K from the sipc (which despite this writer's claims i doubt they'll get back a penny unless i'm missing something)

always happy to be corrected if i'm wrong but i THINK this essay is likely wrong

[Waiting For Everyman]

16. These funds are the OPPOSITE of guaranteed funds, so HELL NO!

Investors have to be wealthy enough to lose everything they invest, to even be ALLOWED into these funds. That is the whole point of them.

And these are the same people who call subprime borrowers "stupid, greedy homeowners". Hypocrisy on a stick!

They were with Madoff for the guaranteed 15-20%, and they got it for a long, long time. They got exactly what they bargained for - big returns for big risk.

Fuck them! Every one of them. I don't care WHO they are, or what they were told. THEY were the "highly educated", who could afford all the legal or financial advice they could want on top of THAT.

Hell no, not until every low to mid-level debtor is bailed out and gets reduced terms FIRST. And higher wages.

[Laelth]

17. Hear, hear. Well said. n/t

:dem:

-Laelth