Bernie Madoff, who wears a bullet-proof vest when he goes out thanks to his fear that someone wants to shoot him, has been getting the kind of obsessive media attention that used to be reserved for O.J. Simpson back in the 1990s. They cover the entrance to his apartment and the voyages he takes to lower Manhattan's courthouse.
Now it looks like the media has a new Madoff angle to chew on. He made up the account statements that he sent to his victims. And investigators can find no evidence that he conducted any trades. For example, one Madoff victim's November 2008 account statement showed all sorts of trades -- including the buying and selling of shares in Fidelity's Spartan US Treasury Money Market Fund. But Fidelity has no record that Madoff's firm dealt with the Fidelity unit the works with investment advisers like Madoff.
If Madoff was not making up account statements he could not have pulled off his fraud. Of course the same thing can be said for Satyam Computer Services (NYSE: SAY) and Enron. As I have posted, when you allow a company or an investment manager to write their own report card, you are just asking for trouble. Simply banning that practice and replacing it with a 100% independent group of financial statement preparers would save society uncounted misery.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and is the author of You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He owns Fidelity's Spartan US Treasury Money Market Fund shares and has no financial interest in the other securities mentioned.
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Reader Comments (Page 1 of 1)
1-15-2009 @ 11:54AM
Dan Medler said...
As many peoples lives he distroyed, does not surprize me may he get what's comng to him
1-15-2009 @ 1:12PM
BHarrison said...
To put this into perspecitve as to the INTEGRITY of the markets, if Madoff was simply "making up his trades", then how in the world did he manage to become a "Chairman of the NASDAQ?
Doesn't that shake the very core of NASDAQ? How could they have possibly made a guy like Madoff a "Chairman" . . . Doesn't the NASDAQ have a vetting and Review Board or processfor people who are selected as "Chairmen"? Obviously they did not have any screening or evaluation of "Chairmen" of the NASDAQ.
This merely points out the absurdity (and CORRUPTION) of the lack of INTEGRITY in ALL of these organizations, doesn't it? The NASDAQ has lost all credibility over this.
. . . and this is merely the "tip of the iceberg" when it comes to the corruption in the markets and the FIs. These are truly UNPRECEDENTED TIMES in our history, and the history of the world.
This has taken the USA from being the most powerful economic nation in the world to being close to being a THIRD WORLD COUNTRY rampant with FRAUD and PERVASIVE CORRUPTION in both our politics and in our business enterprises.
The American people have allowed all of this to occur due to their pervasive apathetic indifference to the workings of government and business; and lack of demands for INTEGRITY in government and business. We have brought these problems down onto ourselves, never realizing how drastic and destructive the outcome would be for each of us personally.
Well, the chickens have come home to roost; and it isn't a very pretty or comfortable situation, is it?
The corrupt politicians and busninessmen are NOT going to change on their own . . . they are going to continue to try to "game" the systems. The question is: "What are the Americna people going to do?" It starts with EVERYONE contacting their Congressmen via email, faxes, letters, telephone calls, and demanding that Congress expeditiously work to instill regulations and oversights to clean up this mess.
If YOU dn't do YOUR PART, then nothing is going to change much . . . isn't that PROVEN by the past eight years and the way that all of this has come about?
It IS time for the American people to start taking actions . . . sign petitions for recall elections of INEPT, INCOMPETENT and/or CORRUPT Congressmen . . .