Madoff Investors

[ferco]

Are there any Madoff Investors on the ER Forums. What is the probable personality / professional make-up of the "M" investors. Might they be closet ER's? What would my fellow ER forum members do if they'd lost ALL their money in this scandal? Is there a potential government bailout proposal for these individuals?

 

[FinanceDude]

Don't know, I doubt anyone on here is of the mindset to pay 1-2% a year, plus 20% of the profits to ANY manager, even Warren Buffett. Would you expect ANYONE to admit to being a Madoff victim? Because, I wouldn't.........

There will be NO bailout for the victims of this, we need that money to prop up our failed automakers.......

 

[cashbalancetrouble]

I would entirely expect Mr. Madoff was sincerely mis-understood and just trying to do his best for those whom intrusted him with their life savings and other such valuable assets. He likely will be bailed out by the federal government too!

 

[dex]

Don't know, I doubt anyone on here is of the mindset to pay 1-2% a year, plus 20% of the profits to ANY manager, even Warren Buffett. Would you expect ANYONE to admit to being a Madoff victim? Because, I wouldn't.........
.

Barron's said he didn't do that. It said he had a trading firm and he was willing to take his profits from there. Of course this was part of the scam. No fees - more people gave him money.

see the Dec 20 issue I think

 

[FinanceDude]

Barron's said he didn't do that. It said he had a trading firm and he was willing to take his profits from there. Of course this was part of the scam. No fees - more people gave him money.

see the Dec 20 issue I think

I know that, but OP was asking whether folks on here would invest with a guy like Madoff, and I just posted what MOST hedge fund managers take as profit......

I suppose the uber wealthy clients of Madoff couldn't believe their "good fortune", paying FEES LOWER THAN Vanguard for a "world-renowned" money manager. Shouldn't that have raised a few red flags??

 

[REWahoo]

Looks like this particular Madoff investor might have exceeded his risk tolearance:

Thierry Magon de la Villehuchet, a fund manager who reportedly lost large sums in Bernard Madoff's alleged $50 billion Ponzi scheme, was found dead in a New York office building, according to media reports Tuesday. A New York City Medical Examiner spokeswoman told Reuters that de la Villehuchet, 65, was pronounced dead at 8 am Eastern, and that the cause of death was not known.


Fund manager tied to Madoff loss found dead: reports - MarketWatch

 

[Dawg52]

Looks like this particular Madoff investor might have exceeded his risk tolearance:

Thierry Magon de la Villehuchet, a fund manager who reportedly lost large sums in Bernard Madoff's alleged $50 billion Ponzi scheme, was found dead in a New York office building, according to media reports Tuesday. A New York City Medical Examiner spokeswoman told Reuters that de la Villehuchet, 65, was pronounced dead at 8 am Eastern, and that the cause of death was not known.


Fund manager tied to Madoff loss found dead: reports - MarketWatch

I'm still alive and taking my meds. I've screwed up every way possible through my investments, but this is one of the few schemes I didn't get in. Of course I wouldn't have been eligible anyway.

 

[73ss454]

Hey Dawg, maybe there's still time to transfer over some CD's to Madoff.

 

[Frugalityisthenewblack]

widow loses 2 million and is only left with social security

Video - Breaking News Videos from CNN.com

 

[Frugalityisthenewblack]

For those who have lost money to this guy this blog has been set up. ( I wasn't a Madoff investor thank God----losing 50% is a lot better than losing 100%)
http://www.bernard-madoff-fraud-resources.com/

 

[REWahoo]

I'm beginning to think there might be an echo on this thread...

 

[jazz4cash]

There was an interesting piece on CNBC about Madoff investors that got out before the disaster. The report indicated these "lucky" investors were lining up lawyers to defend themselves from the bankruptcy process which would seek to recoup the withdrawn funds, especially if there was evidence the investors suspected the scheme was corrupt. Those folks may have thought they dodged a bullet, but they could be forced to contribute to the mitigation fund.

 

[Bikerdude]

I would entirely expect Mr. Madoff was sincerely mis-understood and just trying to do his best for those whom intrusted him with their life savings and other such valuable assets. He likely will be bailed out by the federal government too!

I think more likely Madoff will be the poster boy for the great financial crisis of 2008 and will be made an appropriate example. Other Wall St."scumbags" guilty of less obvious thievery will get off Scot free.

 

[barbarus]

I would entirely expect Mr. Madoff was sincerely mis-understood and just trying to do his best for those whom intrusted him with their life savings and other such valuable assets. He likely will be bailed out by the federal government too!

The government is in on the deal.

 

[george76]

There will be NO bailout for the victims of this, we need that money to prop up our failed automakers.......

And the $700 billion to Wall Street.

By the way, if the Madoff investors get bailed out, shouldn't those people that invested with Enron (including all the employees with their 401's) also get bailed out. There was fraud involved there as well. It gets to be a slippery slope. Where does get line get drawn?

Also, if the government bails out the Madoff investors, aren't they at the same time penalizing those folks who took a more conservative approach and invested in CD's (as an example) rather than in Madoff's riskier investments? So, on top of getting lower rates, the CD investors now also would have to subsidize those folks who took bigger risks.

 

[growing_older]

Also, the Madoff scheme was widely believed to be illegal - possibly some kind of insider trading - so a bail out would be rewarding those who mostly believed they were skirting the law, if not outright breaking it. Rewarding those who knowingly participated in a shady deal, while penalizing those who avoid lawbreaking would be a bad precedent indeed.

So on top of getting lower rates, the CD investors would also subsidize Madoff investors who tried to cheat the system with what they believed to be an illegal scheme, but hopefully not too illegal so they wouldn't get caught. Too bad they got caught, although not the way they expected.

 

[Independent]

Are there any Madoff Investors on the ER Forums. What is the probable personality / professional make-up of the "M" investors. Might they be closet ER's? What would my fellow ER forum members do if they'd lost ALL their money in this scandal? Is there a potential government bailout proposal for these individuals?

I think the strongest trait of Madoff investors is the belief that the best deals go to the "insiders". Anybody who is just buying "retail", such as investing in Vanguard's index funds, is missing out on the real money.

I'm not saying that this belief is wrong. In fact, it may be a central theme in the way the Madoff investors made their money in the first place. But, it does seem to be a critical part of giving money to one very well connected (and wealthy) person, who only accepts money from selected individuals, and believing that he can consistently beat the market.

I can't see anybody who posts here regularly losing all their money by trusting one adviser. This board is full of self-directed investors who are big on diversified asset allocation schemes.

I'm hoping, and I think I'd be willing to bet, that there won't be any broad gov't "bailout". At least not in the sense of "You lost $10 million to Madoff, here's a check for $10 million". So far, it appears that Madoff's investors are not financial institutions which are likely to fail due to this one disaster. Maybe there is a bank somewhere that's going to get some of the $700 billion, and part of the reason is Madoff losses. I'm sure the gov't is going to provide a court system that people can use to try to recover cents on the dollar. I don't think they will get much from Madoff, but they may get something from investment advisers who put them into Madoff's system.

 

[OAG]

Early on there was some mention that SIPC Insurance may apply to some of these people. Have not heard much mention of it lately but also have not seen anything mention that it has been ruled out in this case.

 

[freebird5825]

Are there any Madoff Investors on the ER Forums. What is the probable personality / professional make-up of the "M" investors. Might they be closet ER's? What would my fellow ER forum members do if they'd lost ALL their money in this scandal? Is there a potential government bailout proposal for these individuals?

I never heard of the guy until I saw the name here.
I would never trust my portfolio to one single person or firm.

 

[Texas Proud]

And the $700 billion to Wall Street.

By the way, if the Madoff investors get bailed out, shouldn't those people that invested with Enron (including all the employees with their 401's) also get bailed out. There was fraud involved there as well. It gets to be a slippery slope. Where does get line get drawn?

Also, if the government bails out the Madoff investors, aren't they at the same time penalizing those folks who took a more conservative approach and invested in CD's (as an example) rather than in Madoff's riskier investments? So, on top of getting lower rates, the CD investors now also would have to subsidize those folks who took bigger risks.

I doubt if they will get a bail out... most of the 'bail out' is really loans that are supposed to be paid back.... even the one to the autos...

However, if they were insured like a normal brokerage account, then it is not a bailout... I just don't know if they were insured or not...

 

[Texas Proud]

Also, the Madoff scheme was widely believed to be illegal - possibly some kind of insider trading - so a bail out would be rewarding those who mostly believed they were skirting the law, if not outright breaking it. Rewarding those who knowingly participated in a shady deal, while penalizing those who avoid lawbreaking would be a bad precedent indeed.

So on top of getting lower rates, the CD investors would also subsidize Madoff investors who tried to cheat the system with what they believed to be an illegal scheme, but hopefully not too illegal so they wouldn't get caught. Too bad they got caught, although not the way they expected.

Kind of a bogus argument since we now know that it was a Ponzi scheme and so NOT illegal inside trading.... and there were NO gains at all, just made up numbers...

What will be interesting is how much money is left and how much they get out of him and his family.... I think he should lose ALL he owns... and it appears his sons were involved and they should lose all they own... but I doubt it will happen... they will spend it on lawyers to try and keep them out of jail..

 

[growing_older]

Kind of a bogus argument since we now know that it was a Ponzi scheme and so NOT illegal inside trading....

I do not understand why you believe this argument to be bogus.

Here's an "investment" plan that (nudge, nudge, wink, wink) will earn you money in good times and bad and with the excellent insider connections of the partners, will likely never be prosecuted. It's technically illegal, but since it's the investment manager doing it, you should be safe.

If you invested money in such a scheme to get higher returns, why should people who avoided such chicanery bail you out? We do not normally use tax money to reimburse victims of fraud. We do not normally use tax money to reimburse greedy victims of con artists. We do not normally use tax money to reimburse people who invest in fradulent tax xhelters. We do not normally use tax money to reimburse people who fail at criminal enterprises. There are many more examples.

There is an issue with Moral Hazard here. If anyone attempting to skirt the laws is guaranteed to be made whole, then there is strong incentive to seek out and invest in such questionable schemes - indeed there is a strong reason NOT to invest in lesser performing, but known to be legal, investments.

The investors thought they were cheating, but getting away with it. In fact it turned out that the investment manager was cheating the investors. Why should they get any more sympathy than others with legitimate losing investments? In fact, they thought they were cheating. Why should they get any sympathy at all?

 

[haha]

There is an issue with Moral Hazard here.

If there were no moral hazard, our government would not be interested.

 

[barbarus]

Who thinks Bernie Madoff is the only guy running this type of scam?




Who thinks we are going to see a number of individuals and companies involved in similar chicanery dragged out into the light as the economy continues to tank?


Of the many things he's done, Bernie has done grievous injury to trust as an important component of financial transactions. At least some investors are going to be demanding much more in the way of documentation before they take any more fliers with any investment opportunities, be they ordinary private investors up to mighty corporations.

I don't, for instance, think the goal of thawing out the credit markets has been advanced by Mr. M's antics.

 

[Texas Proud]

I do not understand why you believe this argument to be bogus.

Here's an "investment" plan that (nudge, nudge, wink, wink) will earn you money in good times and bad and with the excellent insider connections of the partners, will likely never be prosecuted. It's technically illegal, but since it's the investment manager doing it, you should be safe.

If you invested money in such a scheme to get higher returns, why should people who avoided such chicanery bail you out? We do not normally use tax money to reimburse victims of fraud. We do not normally use tax money to reimburse greedy victims of con artists. We do not normally use tax money to reimburse people who invest in fradulent tax xhelters. We do not normally use tax money to reimburse people who fail at criminal enterprises. There are many more examples.

There is an issue with Moral Hazard here. If anyone attempting to skirt the laws is guaranteed to be made whole, then there is strong incentive to seek out and invest in such questionable schemes - indeed there is a strong reason NOT to invest in lesser performing, but known to be legal, investments.

The investors thought they were cheating, but getting away with it. In fact it turned out that the investment manager was cheating the investors. Why should they get any more sympathy than others with legitimate losing investments? In fact, they thought they were cheating. Why should they get any sympathy at all?

I say it is bogus since we now know there was no insider trading... no 'illegal' trades going on that we could not get..

Since the basis of the argument is that you might be getting extra return because he was doing illegal insider trading... but you were not getting this extra return by illegal insider trading.. bogus argument... there was an article where this guy had been saying there was no way for the kind of returns that were happening for years... but he was ignored... even if it was illegal insider trading... and I will ask where was it 'known' that he was making these returns because he was doing so illegally It is not illegal to pick winners all the time... you have to have insider information and trade on it to be illegal.. and to tell the truth, if this is what he had done there would be a lot of money to pay everyone because he would have earned it...

I don't give them any sympathy... I don't know anyone who does... to me, a hedge fund is a very risky investment even if it was legal... there have been many who lose almost everything in a bad year... so if they want to invest this way with 100% of their money... then they deserve what they got...