This post is part of our feature on Money Losers of 2008. See all 20.
As we learn more about the scandal involving the investment businesses managed by Wall Street power broker Bernard Madoff, it's a tale of failure by government regulators and investors alike. Madoff saw a weakness in the system and took advantage of people and institutions for about $50 billion (we don't know the final tally yet because Madoff kept several sets of books and the courts need to sort out what's left).
Regulators got too cozy with a man whom they trusted so much that he served on a advisory committee for the SEC on investor information involving scams, while the entire time he was building a business that will probably hold a record for being Wall Street's largest Ponzi scheme. He also served as chairman of the NASDAQ Stock Market.
Investors, including investment advisers and large institutions, were taken in by his charms and overlooked the fact that steady returns, like the ones Madoff promised, were suspect. Indications are that some investment advisers who did their due diligence advised against investing money through Madoff.
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