Frontline Investigates Bernie Madoff
PBS's documentary show FRONTLINE took on Bernie Madoff this week, exposing the history of his operation and how the SEC let him slip through their fingers.
One of the most interesting interview subjects is Madoff's old "business partner" a member of the "feeder firm" that took a percentage for feeding Madoff clients. He claims he didn't know he was sending investors into a ponzi scheme — the firm just cashed the checks from Madoff until the SEC shut them down for operating without a license back in the '90s.
Interesting stuff.
The Madoff Affair [FRONTLINE]
Post a comment
Comments:
History Channel already ran a pretty good documentary on Madoffwithyourcash, so I'll be interested to see the differences.
I'm a die-hard Frontline fan, but found this episode a little flat. While still far beyond the CNBC and History Channel reports, it was pretty short on the insight that I was expecting from PBS. I think we'll need a few years of distance from the lawsuit storms that are brewing to get the whole story. Right now, too many people are too scared to go on the record about the whole mess.
I did find the regulation explanations fascinating though. Bernie got special treatment from the government who turned a blind eye to the fact that he was never registered investment advisor. Would have loved to see more of this angle and a broader explanation on how hedge funds skirt these rules.
Frontline is a great show. When you're tired of the talking (shouting) heads on cable news, some to Frontline for straight information. I thought this was a good episode. It always amazes me how much network news you can watch and still not really know anything.
BTW, Frontline has a great piece in Walmart.
I haven't watched Frontline since... forever, really.
@Pixelantes Anonymous: What does homelessness have to do with social security? Are you confusing it with welfare?
The thing hinted at that my roomie seized upon was the fact that even pre-collapse, everyone knew Madoff was pulling a fast one of some kind. They just thought that they were on the inside, playing the sharpie against the great unwashed masses. They skirted the disclosure laws mandating that Bernie's investment operation be registered in order to keep the "free money" rolling in. And they collected 2 & 20 fees for doing nothing more than forwarding their investors' fees to Madoff.
I had a smidgeon of sympathy before, but after this was pointed out, for around 70% of the participants? Burn, baby, burn!
@meechybee: It's quite easy, actually.
Elect a Conservative Republican to office.
Re-elect him to ensure poisoned seeds grow into bitter fruit.
Appoint a crony like Chris Cox to "oversee" Wall Street.
Ta-Dah!
@takes_so_little: Yup. It's like reading The Economist or The NYT compared to reading The Inquirer or other tabloid papers. There's more information in ten minutes of a Frontline episode than an hour of the network news (and several months worth of local news).
@Trai_Dep: The NYT reports today that $12B was withdrawn from Madoff's accounts in 2008. Half in the last three months before it collapsed.
I think many lawyers will be busy the next couple of years trying to claw back these gains.
It's a shame they can't take strips of raw flesh from the defendants, while they're at it.
@rbb: Alas, the results will are likely to be about the same in the end. The good news is that I am totally pulling for an unforseen and unrealistic development that will help me get my monies back by the time I'm ready hike my pants up and overcook my vegetables.
"We were never pigs" - Michael Bienes
@Trai_Dep: Oh, I won't say EVERYONE, but there's no doubt that a goodly proportion of Bernie's donors figured he was simultaneously giving them an edge as well as removal from said edge. He was fond of implying as much with all his OMG TOP SECRET wink-and-nudge B.S. Anyhow, I don't know if it's true that you can't cheat an honest man - but it's certainly more difficult.
@zibby: Unfortunately, my own pessimistic view is that the government will decide to seize what is left in my 401(K) and IRA accounts in order to pay those who figured the government would provide for their retirement 100%... The Lord takes care of those who take care of themselves. The government just punishes...
@humphrmi: Yup. The guy that was collecting $20m a year for simply forwarding checks to Madoff. Grrr...
@zibby: True, not everyone.
But enough of those interviewed mentioned Madoff's parallel market-making operation (implying they were OK with his potentially front-loading trades for their benefit) with a wink and a shrug.
Now of course, they're in front of cameras speaking of how badly they were taken advantage of.
It's funny how the psychological aspects of these cons work: the "harder" it is to get into these things, the more fiercely people line up to get in.
Seriously, guaranteed 14-20% returns no matter what, even in bear markets?
This was just the rich persons form of the Nigerian scam, everyone was either too greedy to really think about it or knew something was fishy and didn't want to know as long as the money kept flowing.
@Pixelantes Anonymous: pretty ignorant comment as social security has nothing to do with the homeless, and it is run exactly like a ponzi scheme. we should keep in mind though that social security is more than just a gov't retirement fund. it also gives money to people who are disabled and unable to work. Also a guy I know's Mom died when he was a kid and soc sec provided him with some much needed money until he was 18. I do agree with these portions of the program, I just wish we'd scale back the benefits to retirees before it's bankrupt.
@Trai_Dep: Are you implying that Madoff wasn't running the same scheme in the Clinton years? or even the Carter years? I hate when people try to cram politics where it doesn't belong. That's usually how you can tell who's an actual thinker, and who's a political drone
@craptastico: If you watch the episode (and why would you be commenting if not), you'll see that the first complaint filed with the SEC was when GW Bush was President. Likewise, the morphing from a relatively small-scale Ponzi Scheme to the continent-straddling one happened when the Conservatives ran the roost. And whose blind ideology forwarded the notion that any gov't regulation is evil.
So, no.
PS: watch the episode. You'll learn something.
@Trai_Dep: I know more about this than you could imagine, and this scheme was being run since the early 90s, so to blame it on Bush is a little silly. Madoff was first investigated in 1999(who was pres then?) I never said that gov't regulation is evil, unfortunately the SEC has never been very good at its job, and that tends to be the case for most gov't run agencies. To make this a Republican/Democrat issue is nonsense. Since when has either party advocated consumer fraud? You remind me of the idiots that scream the victims deserved to lose their money b/c they were greedy, even though many of the victims were charities.
@craptastico: You'll note I didn't say "Republican". It's the Conservative ideology, which sometimes both parties buy (or are coerced) into, which often leads our nation to these periodic crises.
Now, if you look at which party clings to the Free Market Fundamentalist approach the most fiercely, that'd be, yup, the Republicans. But by focusing on which party at fault is to miss where the ball is.
Casting a hex on both houses, when it was one that did 90% of the heavy lifting, results in an overly cynical, nonfunctional approach to polity, a highly ineffective approach.
And, to suggest that politics has no bearing when discussing how government regulates our security markets, or that it's unfair to bring up politics, seems rather silly. What are we supposed to discuss when these things come up? Celebrity news?
And, back to my original point: while Madoff was in business since the extreme tail end of the 1990s (literally the last year of Clinton's term), the major growth of Madoff's cancer didn't hit until well into the middle of Bush's tenure. As were the ignored red flags and formal complaints.
...So, just to have this straight, you're saying that it was all Clinton's fault? Or that they're even remotely equivalent? Really?!
@Trai_Dep: i think it's the fault of an incompetent SEC, no more, no less. i actually liked Clinton a lot more than GWBush. GW spent as well as anybody, while Clinton watched the budget. Historically Reps were fiscally conservative, which i prefer, but not lately.
@rbb: Exactly. If you tried to create a retirement plan for a group of people, built it to work exactly like social security, have all the same rules and regulations as social security, and the only difference was that it was privately-run rather than government-run?
Odds are, you'd get the cell right next to Madoff, for running a ponzi scheme. But because the government does it, who is going to press charges?
Madoff's Ponzi scheme is small potatoes compared to the one run by the Federal government called "Social Security."