How to spot the next big Ponzi scheme

On June 29, 2009, Bernard Lawrence Madoff was sentenced to 150 years’ imprisonment in US federal prison.

His crime?

Operating the largest Ponzi scheme ever, which resulted in the defrauding of the clients of Madoff Securities by a total of between USD10bn and USD17bn – there’s still some doubt as to the exact amount – over 20, maybe even 30, years.

What had happened, though it may seem hard to believe, is that he had taken money from investors, including professional fund of funds (FOF) managers, investment managers from pension funds and the like, pretended to make profitable investments using stocks and derivatives, while all the time enriching himself and his family, and paid out “profits” to investors using money received from later investors. This is the classic model of a Ponzi scheme - and it is, of course, fraudulent.

Unfortunately Bernie Madoff is not going to be the last of his type – there will be others, perhaps they're doing it now – and it’s up to future fund managers and supervisors to put two and two together.

So we need to learn.

In this ebook, an anonymous trader, based in Japan, who tracked Bernie M through his career tells the story of Madoff, how he got away with it for so long, and what the lessons are.

Published January 2012
ISBN: 978-1-907720-42-0
PDF: £5.99 + VAT/€7.16 + VAT/$9.30

Bernie Madoff: the Part I Didn't Play in his Downfall - PDF

£7.19

Add to Cart

Euro and dollar prices are illustrative and will be calculated at the current exchange rate at checkout. Prices for electronic products include VAT, which is chargeable in the UK and EU; VAT will be applied or deducted at checkout as appropriate.

Contents

Chapter 1  What happened?
Chapter 2  What's up with the positions?
Chapter 3  The trading strategy
Chapter 4  What the markets tell us
Chapter 5  Looking for confirmation
Chapter 6  Front-runners?
Chapter 7  The final straw
Chapter 8  What unmasks a fraud?
Chapter 9  The three things to take away from it all