The Best Trader in the World Worked for Bernie Madoff

The night Bernie Madoff got caught for running a $60 billion Ponzi scheme I got a call from my friend “Eddie” (not his real name) who for many years worked for Madoff. I couldn’t tell if he was crying but he was very upset. “I can’t believe it,” he said, “Bernie was like a father to me. Mark Madoff was like a brother to me.” We spoke on and off all night as more news came in and he came to grips with the new world he was living in.

I called Eddie yesterday and said I wanted to write an article about him and how I thought he was the best trader I ever knew. I’ve met and worked with over a thousand traders. I traded for hedge funds. I ran a fund of hedge funds. I’ve written five books on trading. And Eddie is the best trader I've ever come across.

Is the S.E.C. More or Less Scary Today?

Let's say you are currently running your own shady investment scheme. Perhaps you, like Madoff, have anticipated many times over the day that you would be exposed. And yet you haven't yet been. Do the current revelations about the S.E.C.'s ineptitude give you comfort, believing the agency is congenitally incapable of rooting out fraudsters unless they confess to their own sons, or are you more frightened today than you were yesterday, believing the agency cannot possibly perform any worse than it has in the past and that your days are numbered?

Thank God It Was $65 Billion

When Bernie Madoff turned himself in, his firm owed investors $65 billion, but had only about a billion dollars on hand. Never before have we seen anything close to a $64 billion fraud. But in an important sense, the unprecedented vastness of Bernie Madoff’s fraud is a good thing. “If I hadn’t invested in Madoff, […]

Profits of Doom

| Bernie Madoff pleaded guilty to securities fraud today. His scheme saved some lives, briefly, then ruined them utterly. Supermodel Carmen Dell’Orefice, for example … [%comments]

Would a Fraud Bounty Have Exposed Madoff Years Ago?

Laura Goldman is a money manager who claims to have figured out back in the 1990’s, in the space of about 45 minutes, that Bernie Madoff was a fraud. In this Fox Business interview, she discusses (very entertainingly) her encounters with Madoff. At the time, Goldman worked for Paine Webber (remember them?): He was buying […]

For Madoff, Reputation Is Apparently a One-Way Street

Our friend James Altucher, in an interview at Yahoo!’s Tech Ticker, talks about visiting Bernie Madoff and his son Mark back in early 2005 to pitch them his fund of funds: I had a fund of what’s called PIPE [private investment in public equity] hedge funds. And I went through the whole pitch. My returns […]

The Great Giveback

Whatever we end up calling this recession/depression, I think we can safely name one small part of it: The Great Giveback. There seems to be a rebate fever among firms trying hard to keep their customers happy, or keep their customers at all. JetBlue just announced it will give full ticket refunds to customers who […]

The Winning Definition of "Madoff," in Limerick Form

We’ve invited a special guest to judge our Bernie Madoff limerick contest: Chris J. Strolin, founder and editor-in-chief of The OEDILF, The Omnificent English Dictionary In Limerick Form. The OEDILF is an international online dictionary-writing project, the goal of which is to write at least one limerick for every definition of every word in the […]

The Mails Are Alive With the Jewels of Madoff

Some of them, according to this New Yorker piece by Lizzie Widdicombe, are being sent in by Madoff victims to raise cash:

Back in midtown, business was brisk at the Madison Avenue headquarters of CIRCA, a jewelry-buying firm, where Madoff-related jewels had been incoming all month, like expensive shrapnel.

The Madoff Tax Advantage

I just received the following e-mail from my accountants, who have several clients invested with Bernard Madoff. They are passing along some year-end tax advice that contains at least a sliver of good news: Taxpayers who invested in Bernard L. Madoff Investment Securities LLC directly, or through a fund of funds, have a loss that […]