I'm not so sure about this. I agree with you about the sons possibly knowing something and then turning him in as a cover but what is peculiar is that he was supposedly avoiding reporting requirements with the SEC by going all cash just prior to the reporting deadline. That means that if he was in legitimate positions he supposedly liquidated regardless of price. Maybe that's what happened and caused the losses but in most Ponzi schemes the losses usually occur from funding lifestyles and paying back early investors and funding redemptions as they come in not in actual investments or trading losses. I doubt that he was ever actually trading much and was really just robbing Peter to pay Paul and using his name and status to further the scheme. It took a huge amount of redemptions all at the same time and no new money coming him to finally push in into a corner.
Another question is why did Madoff admit that it was a Ponzi scheme? If the money was genuinely lost, that isn't criminal. You would think that any criminal in that situation would just blame the credit crisis and bad investments even if it was a Ponzi scheme to some extent. Hire good lawyers, shred the docs and make the Feds prove it was a Ponzi scheme. No, there has to be some reason that Bernie is falling on his sword. He is sacrificing himself for some greater cause or purpose.
Madoff going to cash before deadline if he had positions would be guaranteed some loss in a bear market like you say. Now add to that big redemptions of the last year, add to that maybe not getting new investors to keep the scheme going. He had no option but to give up. I wonder if he started with good bets, good trading, but then made some big bet mistakes. And then this is when he used a ponzi scheme to cover his loss, became profitable again, and never stopped the scheme. So hard to believe a man who knew the money was invested in so many charitys would not care. He pick and choose his investors, why charitys?
Any charity that invested their entire equity with one manager needs to have the trustees fired and then jailed.
The Wall Street Journal reports this past weekend in their coverage of Madoff's fraud that Harry Markopolos, an industry executive first contacted the SEC in 1999 with his suspicions. "Markopolos, who years ago worked for a rival firm, researched the strategy( employed by Madoff ) and was convinced that the results weren't real. 'Madoff Securities is the world's largest Ponzil scheme,' Mr. Markopolos wrote in a letter to the SEC. Mr. Markopolos pursued his accusations over the past 9 years, dealing with both the New York and Boston bureaus of the agency, according to documents he sent to the SEC that were reviewed by The Wall Street Journal." Typical SEC. Asleep at the wheel. Cox and Linda Thomsen need to go to Prison.
I am sure he started with go intentions. I think he was like the dumb guy in Europe. People keep giving him money and he figured maybe he would die before having to explain it. I am lost was it 50 billion in client money or was there margin from a third party?
Here is another question. Out of the 3 possible solution, why did he choose the worst?: 1. Suicede. 2. Giving himself up and go to prison. 3. Skip the country with 100 million. #1 and #3 would have been my choice. Oh hell, OK, #3. Who the hell wants to die in prison when 70???
Absolutely correct. Read about one foundation this morning that fired staff and shut doors the day after hearing this. Cannot believe they put all their funds in one place - especially when they knew (or should have known) the assets were not held by an independant custodian. Being wealthy is not the same as being smart.
For the thick headed amongst you I'll spell it out in childs language. This is what happens when the science fiction of innocent until proven otherwise is allowed to fester , encouraged by liberal scum. Any one entrusted with the funds of others SHOULD BE FORCED TO UNDERGO RIGOROUS VETTING AT RANDOM. No exceptions. No excuses. No bullshit about black boxes and protecting proprietary methods. If you won't subject your self to frequent , random, and extensive review, then MANAGE YOUR OWN FREAKING MONEY, not the publics. Our regulatory agencies have proven to be nothing but inept , bungling , idiots.