Mar 23, 2009
For nearly two decades Bernard Madoff ran a fraudulent “Ponzi scheme,” stealing at least 65 billion dollars. Taking money in, he regularly sent investors a report on their fabulous “earnings.” If someone wanted to take back money, he used part of the new money coming in to reimburse them. The rest he squirreled away for himself.
How did he get away with it? Simple.
He depended on the very same laws and regulations that allowed the big Wall Street banks and “hedge funds” to defraud the whole country. He depended on the same willingness of government to overlook financial fraud – letting Wall Street push speculative frauds such as “securitized mortgage” bonds and “counterparty derivatives.”
There are only two differences between Madoff and all the other Wall Street crooks: 1) he stole much less; 2) government didn’t bail him out.