Madoff: The Monster Of Wall Street

[DanaK]

4-part Netflix doc series on the rise and fall of financier Bernie Madoff, who orchestrated one of the biggest Ponzi schemes in Wall Street History. Premieres January 4 2023

[EtheltoTillie]

Kind of dull. Why now?  I was learning nothing new and turned off after 10 minutes. Apparent the big reveal was the inclusion of deposition testimony, but I don’t need to sit through hours of this or listen to that psycho. 

[Adiba]

I haven't finished the show, but I was interested because I wanted to know how it all started and how he got so many to trust him with large sums of money for so long. I also wanted to know how he got some of his employees to do the jobs it took to run the scheme. I knew the basic story when it came out, but I didn't really follow it or pay much attention at the time it broke. 

I did want to know what Madoff's background was and what would have motivated a person to start something like this--which the first episode kind of addressed. Yes, greed is the primary motivator, but there were other factor involved as well.

[Showthyme]

11 hours ago, Adiba said:

I haven't finished the show, but I was interested because I wanted to know how it all started and how he got so many to trust him with large sums of money for so long. I also wanted to know how he got some of his employees to do the jobs it took to run the scheme. I knew the basic story when it came out, but I didn't really follow it or pay much attention at the time it broke. 

I did want to know what Madoff's background was and what would have motivated a person to start something like this--which the first episode kind of addressed. Yes, greed is the primary motivator, but there were other factor involved as well.

It is mind-boggling that none of the employees from the 17th floor went to law enforcement. I wonder what the recruitment and training process looked like. What does your first day of employment look like? It is weird that no one asked questions when people with little experience or education had multi-million dollar homes, yachts, expensive cars, etc. 

The real tragedy is that no one from the SEC suffered any consequences.

[Crs97]

We ended up becoming engrossed.  Even our teenager came in to ask a question and found himself sitting down and asking about Madoff instead  I was too busy at the time to follow the details.  Unbelievable how many times the math guy alerted the SEC to no avail.

Edited January 12, 2023 by Crs97

[PRgal]

I'm 2 1/2 episodes in and I really don't understand how many didn't find him suspicious at all.  He didn't look at people in the eye and the business wasn't registered.  Skirted around things.  Pretty sleazy to me.

[Crs97]

When your portfolio seems to keep growing I guess you ignore a lot of red flags.  See also Theranos.

[DanaK]

I haven’t seen this yet, but I think Madoff being Jewish and a lot of his clients being Jewish made for some ties that possibly blinded a lot of the clients and potential clients to red flags. There was a trust there of someone like them

[Adiba]

On 1/19/2023 at 9:28 AM, DanaK said:

I haven’t seen this yet, but I think Madoff being Jewish and a lot of his clients being Jewish made for some ties that possibly blinded a lot of the clients and potential clients to red flags. There was a trust there of someone like them

Harry Markopolis  (the math whiz who first determined it was a fraud) called it an “affinity con” because one tends to trust others more if they are part of their community or group. A lot of Madoff’s clients were through word-of-mouth testimonials from other investors who were already getting great returns.

[Bastet]

I watched this last night and this morning, and learned a lot about the before and after; at the time, I only paid attention to the arrest.  I had no idea he was such a big deal in the industry, and certainly didn't know about the ethical reputation he'd earned by being one of the only market makers to uphold his obligation to buy on Black Monday.  I also didn't know about both sons dying. 

I found it well done, especially the final installment that did a great job putting this in context by talking in detail about how many more people outside of that one company should have gone to jail.  The entire industry is toxic, with corruption nearly inevitable, so the fact we don't have robust government oversight means an even bigger fraud is coming.  (The SEC reminds me of the FAA -- too enmeshed with the industry it's tasked with regulating.  And there's no equivalent of the NTSB in the financial industry to partially offset that.)

I also thought they did a good job showing how there are different categories of victims.  I thought the inclusion of the couple who invested their life savings after selling their small business was a solid choice; on paper, one could look at their $900k investment and scoff, "Well, if you had $900k lying around to play stock market with, how bad am I supposed to feel for you?"  But they represent a lot of people in this country -- people whose modest home is their only other asset (I love the part about tallying the contents: um, I have six pairs of jeans) and whose million dollars is the net result of their life's work.  That investment account isn't one of six on top of their pension and 401(k), it's the thing they live off of.  They did exactly what our capitalist society told them to do.

And they were attracted to Madoff's asset management service not because of any "get rich quick" promise but a documented (falsely, but documented) history of steady returns.  They only signed on after researching Madoff showed him to be a Wall Street icon, lauded for being a man of his word, and cleared of any wrongdoing by the SEC.

They were also interesting in the segment about what techniques the law required the trustee to use in order to recover money, with the wife finding it unconscionable to go after people like them based on their withdrawals, and the husband saying he hates the law, but he doesn't have a better solution (I do, require companies to properly fund the SIPC insurance account and don't put in a clause that says victims of Ponzi schemes don't qualify!) and it was the only way to get money to other victims.

If Madoff hadn't had a thriving, legitimate business operating alongside this mess the whole time, I'd be side-eyeing more people.  (It's utterly pathetic that wasn't enough for him, and he had warped views from the beginning, viewing his parents as failures when they had a solidly middle class lifestyle.)  That, plus effective endorsement by the SEC, is a significant veneer of respectability.

But given it took Harry Markopolis less than five minutes to determine this was a fraud, probably a Ponzi scheme, less than five hours to do the math proving it impossible, and maybe five days to lay out in detail dozens of red flags, a shit ton of people willingly turned a blind eye.  They didn't know the details only because they didn't want to; they knew something hinky was going on (thus the secrecy), but didn't care because they were making money.  That's different than the people who weren't investment savvy enough to recognize the "That's not how it works, that's not how any of this works" signs. 

I appreciated including the point Madoff's grief about his family wasn't about him loving them, but him having loved them admiring him -- the loss of that is what he regretted.  Because I found it telling that when he knew the jig was up, he didn't cash out what he could and flee the country, he started cutting checks to long-time investors, employees, and family members.  I'd have been a lot more impressed if he cut checks to the small investors least able to survive what was coming, but even what he did do isn't impressive because it wasn't about loyalty, it was about looking good one last time.  (Like when he borrowed money from his father-in-law way back when to cover clients' losses -- it wasn't about atoning for his actions [reckless, high-risk investment choices], it was about covering up those actions and making it look like he was so brilliant he'd managed to keep his clients from losing any money when everyone else took a hit.)