No One Wants to Read About Madoff

This is a case where the publisher should allow more time between the event and book launch. No one wants to be reminded of Bernie's deeds, especially while the country is still mired in a recession.

In Madoff's Words

Here's what I wonder, why did Madoff's victims think they were getting better returns than everyone else? At the very least that says Americans are financially dim. It seems Madoff did what he did without a single skeptic. It's quite fascinating.
Listen to NPR reporter Jim Zarroli talk about what he saw at the courthouse here. Zarroli thought Madoff's apologies were genuine. He said he thinks Madoff just got in over his head. A little lie turned into a big lie.

CNN: "I operated a Ponzi scheme," said Madoff to the packed courtroom, after U.S. District Judge Denny Chin told him to explain his crimes.

"I thought it would end quickly, but it proved impossible," said Madoff, who stole from thousands of victims through his investment firm. "I am ashamed for these criminal acts. I always knew this day would come."

U.S. District Court Judge Denny Chin remanded the 70-year-old to jail following his confession. He was taken to Manhattan Correctional Center, near the courthouse in lower Manhattan.

He could face a maximum 150-year sentence. His sentencing was set for June 16.

Update: Just found this editorial offering advice in the Chicago Tribune:

We don't blame Madoff's victims—individuals, charities, other investment funds—for his conduct. That said, those of us trying to save colored beads and sea shells to pay for college or retirement need to learn lessons so we don't ever find ourselves in their predicament.

Bernie Madoff operated in a lofty market niche, catering to sophisticated investors, many of whom arrogantly thought they knew more than the rest of us. Their supreme confidence in their own judgment left them vulnerable. More proof that chubby turkeys make fine Thanksgiving entrees.

'Twill ever be thus. Not until the Earth flies into the sun will we eliminate unscrupulous investment advisers skilled at separating people from their money.

There are, though, ways not to fall prey.

The most elemental is to make sure you understand who regulates anyone to whom you hand your savings. Banks and brokerages that serve the general public are subject to more stringent scrutiny by regulators than are boutique firms such as Madoff's.

You can't guarantee that even your old friend the broker is honest. But you can make sure you know who's responsible for confirming that what you own really exists—and it's really yours. Example: You want to be sure government regulators or independent auditors are regularly confirming that, say, the shares of stock that a bank is holding on your behalf really are there.

SEC Ignored Madoff Warnings

NYT: A former investment manager is prepared to tell a House hearing on Wednesday that the Securities and Exchange Commission ignored his repeated warnings about the dealings of the disgraced financier Bernard L. Madoff.

The manager, Harry Markopolos, asserts that he submitted warnings about Mr. Madoff since 2000 and he assails the agency for ignoring his warnings or brushing them aside. “Nothing was done,” he declares, in what Dow Jones Newswires and Fox Business report is his prepared testimony.

“There was an abject failure by the regulatory agencies we entrust as our watchdog,” Mr. Markopolos says in his testimony. Mr. Madoff was arrested in December and accused of running a $50 billion Ponzi scheme.

Mr. Markopolos says his experience with most S.E.C. officials “proved to be a sytemic disappointment, and lead me to conclude that the S.E.C. securities lawyers, if only through their investigative ineptitude and financial illiteracy, colluded to maintain large frauds such as the one to which Madoff later confessed.”

Here is Markopolos' testimony. It looks like there is a lot of email evidence.

Goodbye Chris Cox Hello Mary Schapiro

With the ease at which Ponzi extraordinaire Bernie Madoff bilked billions of dollars out of people, it seems that John McCain was right when he suggested Chris Cox, head of the Securities and Exchange Commission, be fired. Cox seems confused.
Some praise for Cox and a look at the problems at the SEC. 

Obama's apparently replacing him with Mary Schapiro, who would be the first woman to head the SEC.
Here is her bio at Forbes:

Ms. Schapiro serves as CEO of the Financial Industry Regulatory Authority, created in 2007 through the consolidation of the National Association of Securities Dealers ("NASD") and the member regulation, enforcement and arbitration functions of the NYSE. She previously served as Chairman and CEO of the NASD, as Chairman of the Commodity Futures Trading Commission and as a Commissioner on the Securities and Exchange Commission. She is currently a director of Kraft Foods Inc.

Schapiro is no stranger to rebuilding:

WaPo: Since arriving at the broker-dealer group NASD in 1996 on the heels of a price-fixing scandal, Schapiro has rebuilt the group's enforcement division into a legitimate regulatory watchdog. On her watch, the NASD expelled crooked brokers, helped clean up biased investment banking research and cracked down on mutual fund sales abuses.

An October interview with Schapiro: