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 were great, they were very excited, but they said, “James, we love you but we cannot invest in your fund of hedge funds.”
And I said, “Why not?” And they said, “Here at Madoff Securities, reputation is the most important thing, and to have that money go out there, you’re sending that money out there, we have no idea about the hedge funds you’re in. We cannot take any reputation risk. … I’m sorry, it’s just our policy. No reputation risk at all.'”
Just a tad ironic, no? The rest of the interview, by Aaron Task, is also interesting.
Among the highlights:
What is your sense about whether Madoff was really working alone as he has claimed?
No, clearly he wasn’t, because you know there were printed statements being sent out to people. You know, even Mark Cuban wrote on his blog: Who wrote the software to process all these statements? There’s some weird thing that’s going on that we don’t know about.
You know that saying, like if you owe $10,000 to the bank, they own you, but if you owe $50 billion to the bank, you own them? Bernie Madoff owns the country basically, because where is the $50 billion? And there’s a lot of unanswered questions here while he’s just running around.
I mean, I got a call the other day from somebody I knew, she had a million and a half invested with him and now she has $100,000 left to her name. She’s about 60 years old and her question was: what do I do?
There’s no more pep talks, there’s no more optimism for her. My answer was basically this: You’ve got to sell your house, you have to figure out what skills you have, and get a job. You’re going to have to do it. And then the optimism is, it’s not so bad to work. It’s not a bad thing. Like, trust whatever higher power you believe in and try to do good in the world.