Awk

Posted by Bess Levin, Dec 12, 2008, 11:51am

According to Charlie Gasparino, the SEC received a letter in 2005 that stated, "Bernie Madoff is running a Ponzi scheme."

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Comments

1

Posted by guest , Dec 12, 2008 11:55AM

What a shocker...the SEC not investigating allegations it receives...gee that Never happens LOL.

2

Posted by guest , Dec 12, 2008 11:56AM

Cox's head still there?
Amazing what this idiot has managed to get away with so far.

3

Posted by guest , Dec 12, 2008 11:57AM

Too fluid, didn't read

4

Posted by asiankida , Dec 12, 2008 11:57AM

or not accomplished rather

5

Posted by guest , Dec 12, 2008 12:00PM

Didn't the White House or the SEC also get a report in 2005 regarding the unsoundness of the housing market and the danger of Alt-A, No-Am, NINJA, subprime loans?

WHO THE HECK WAS WATCHING THINGS?

WHAT THE HECK WAS GOING ON??

OWNERSHIP SOCIETY!!?? WHAT?

9/11. WMD. KATRINA. 2008 CREDIT CRASH.

6

Posted by guest , Dec 12, 2008 12:01PM

This makes one wonder how many other operations like Madoff's were swept under the rug.

7

Posted by guest , Dec 12, 2008 12:08PM

this was our 9/11

8

Posted by guest , Dec 12, 2008 12:09PM

A new word must be created for the level of incompetence of this administration, and a new word for the level of "awkward" if this is true.

9

Posted by guest , Dec 12, 2008 12:10PM

Cox is a major loser...

10

Posted by johnhhaskell , Dec 12, 2008 12:12PM

they also got a complaint that Allied Capital was a Ponzi scheme, so they quickly swung into action to investigate...the person who brought the complaint.

Now that ALD is off 90% from where Einhorn gave his speech I wonder if anyone at the SEC will offer an apology.

11

Posted by guest , Dec 12, 2008 12:12PM

Hopefully the jackass governor of Illinois had all of his cash with Madoff.

12

Posted by guest , Dec 12, 2008 12:12PM

The Fall of Rome

13

Posted by guest , Dec 12, 2008 12:12PM

@8: While I am no great fan of the SEC, a "he's running a Ponzi scheme" letter could have been a sour-grapes-competitor. Plus -seriously, the SEC? They have second-rate guys who stay there a couple of years and move on. You can't stack them up next to a lawyered-up hedge fund who is denying any wrongdoing.

He was investigated for front-running and cleared. What he was doing, of course, was much worse. But as far as the SEC was concerned - the guy had audited financials, passed the front-running test, and had a ton of lawyers bristling and saying all was well. What is a second-rate underpaid guy going to do?

14

Posted by guest , Dec 12, 2008 12:14PM

Hopefully the jackass governor of Illinois had all of his cash with Madoff.

15

Posted by guest , Dec 12, 2008 12:15PM

Chis Cox has exceeded the Bush adminstration benchmark for incomptence previoulsy set by Michael Brown.

I am continually stunned at how incomptent he has been over the last several years and yet stays employed.

There was some SEC spokeswoman on CNBC this morning talking about how fast the SEC has moved to protect the investors in this Ponzi scheme. I was sitting there thinking "you have to be fucking kidding me" and "fire them all".

16

Posted by guest , Dec 12, 2008 12:15PM

At this point, if you are running institutional money (pension, endowment, charity), dont you want out of fucking everything?

Id call in all my money today, who knows who is a crook anymore. The buy-side is going to be even worse than the sell side soon.

17

Posted by guest , Dec 12, 2008 12:17PM

it was 1999

see links in others threads

18

Posted by guest , Dec 12, 2008 12:18PM

An executive in the securities industry, Harry Markopolos, contacted the SEC’s Boston office in May 1999, urging regulators to investigate Mr. Madoff.

Mr. Markopolos continued to pursue his accusations over the past nine years, he said in an interview on Thursday, and according to documents he sent to the SEC that were reviewed by The Wall Street Journal.

“Bernie Madoff’s returns aren’t real and if they are real, then they would almost certainly have been generated by front-running customer order flow from the broker-dealer arm of Madoff Investment Securities LLC,” Mr. Markopolos wrote to the SEC in November 2005.

The SEC declined to comment on the matter

19

Posted by guest , Dec 12, 2008 12:19PM

16 Except that in traditional asset classes (equities, fixed income) you engage an independent trustee to hold the securities for you. Places like BNY Mellon, State Street, Northern Trust. At the end of the day, you can have bad performance, but the chances of someone running away with your bonds are slim to none.

20

Posted by guest , Dec 12, 2008 12:23PM

Nasdaq fraud is just another coffin nail.

http://endofesq.com/?p=695

21

Posted by guest , Dec 12, 2008 12:23PM

See link- hat tip to naked shorts
http://nakedshorts.typepad.com/files/madoff.pdf

Article seemingly incredulous about the returns back in 01... old adage.. if it seems too good to be true it could be because it is...

22

Posted by guest , Dec 12, 2008 12:24PM

#5 sounds like Brick from Anchorman when he just yells out random thoughts in his head..LOUD NOISES!

hey champ, why don't you sit this one out

23

Posted by guest , Dec 12, 2008 12:26PM

@5,8
Bush is a sign of the Apocalypse --jeebus doesn't luv the u. s. of a, no mores

24

Posted by guest , Dec 12, 2008 12:33PM

“Madoff started his firm in 1960 with an initial investment of $5,000,[3] after attending Hofstra University Law School.”

25

Posted by guest , Dec 12, 2008 12:37PM

who else out there is next to detonate?!

26

Posted by VOL IS KING , Dec 12, 2008 12:44PM

What the fuck, the whole stock market is a Ponzi scheme.

The SEC should investigate why the fuck all these mutual funds exist solely for the purpose of under performing the market. Then I want to know if diversification works how 499 stocks in the S&P 500 were all down for the year through November? I want Markowitz, Sharpe, Fama and Scholes right next to Mugabe at the ICJ on trial. Who the fuck do they think they're fooling? They're all Ponzes one and the same.

27

Posted by guest , Dec 12, 2008 12:48PM

#13 is exactly correct. Until income distribution reverts to the long-term mean there is little chance our guardian class can possibly keep up with the armani-wearing money warriors.

After the depression, subsequent social re-org, and war it was perfectly honorable for talented people to work for the SEC, Fed, US govt, or any public utility without feeling that one was a chump for missing out on the hot market action.

What is funny about this and other sites is how many children and grandchildren of those honorable 1930s-80s public servants now mock anyone who is so untalented and unimaginative as to take a public job.

Sorry kids, gotta go spend my Social Security check on a Boca condo now! bbfn...

28

Posted by guest , Dec 12, 2008 12:48PM

@ 26 I agree.

29

Posted by guest , Dec 12, 2008 12:55PM

Doesn't anyone else here think that Gasparino is just a blowhard?

30

Posted by guest , Dec 12, 2008 1:27PM

@26

No one is saying that diversification guarantees positive returns in bear markets, only that your losses/gains revert to the mean in the long-run anyways (and the variance of returns is lower) so you may as well invest in an index anyways. Diversification captures the long-term expansion of the economy without having to really do all that much. Malkiel said that about three decades ago I think...

The market isn't the Ponzi, just the people who guarantee out-sized returns in the long-run. Some things are, in fact, too good to be true...

31

Posted by guest , Dec 12, 2008 1:34PM

I liked it best when Ponzi would say "Heyyyyyyyyy" to Richie and Potsie.

32

Posted by VOL IS KING , Dec 12, 2008 1:44PM

@30

And why do I care about the variance of the returns again? Markowitz actually managed to convince people that variance was risk, here in lies the problem. Variance is not risk. Risk is maximum loss. The stocks can still go to zero. And my actual point above, the correlations change always and change most precisely when diversification is supposed to protect you. For these reasons the "correct" components of the efficient portfolio are unknown and unknowable. Also people don't actually know their own utility function/ risk tolerance (its dynamic just like the correlations).

I prefer a portfolio with the highest variance I can find, (options on financials at the moment) and then just set my maximum loss = 0 through hedging.

You'd have to be seriously retarded to how stocks.

33

Posted by guest , Dec 12, 2008 1:48PM

Gasparino is doing a good job of trying to dig up what's happenin'. Problem is most of the Wall St. people and SEC are useless, needless,liars so.....Charlie could use help in digging a little deeper. Remember, the disasters of recent months in all respects came under the watch of the current Washington administration. Our civilization has come to where you cannot trust anyone. I am so sorry for the people suffering losses of homes and retirement funds and yes jobs because of incompetence. Anyway, I think for what he has as help, Charlie is doing a good job of trying to find the bastards because the SEC ain't gonna.

34

Posted by VOL IS KING , Dec 12, 2008 1:48PM

correction:

you'd have to be retarded to own stocks.

35

Posted by miami , Dec 12, 2008 1:50PM

SPELLING IS KING:
'You'd have to be seriously retarded to how stocks. '

Put the crack pipe down btw posts, plz.

36

Posted by guest , Dec 12, 2008 1:53PM

32 Its not like the fund is going to just sit there. The reality is that its there to fund some sort of liability, such as a stream of pension payments. The relatively short duration of the liabilities means that the volatility of the assets is totally relevant. The objective is not simply to maximize returns, but instead to fund those liabilities at the lowest possible cost.

37

Posted by VOL IS KING , Dec 12, 2008 2:00PM

good job miami. i don't know what i would do without you. expect of course there weren't any actual misspellings there. I think you mean to say "Proof reading is king" Which, of course, it is not. I have been experiencing some aphasia since I dunno, the age of 6. Checking correctness usually requires for too much energy.

38

Posted by VOL IS KING , Dec 12, 2008 2:05PM

36:

if maximum loss is set to zero then volatility is irrelevant my friend. Think about it....

This is supposed to be the justification for 2%/20%. Except the hedge funds are all fund and no hedge.

39

Posted by guest , Dec 12, 2008 2:09PM

38 I don't know where to begin and don't have the energy to type as much as I would have in order to attempt to convince you. Let me just say that your opinion is very much the minority one, which should get you wondering. Have a good weekend.

40

Posted by Lowly Assistant , Dec 12, 2008 2:23PM

SEC better get some lotion and a box of kleenex. Gonna be a lonely Christmas.

41

Posted by VOL IS KING , Dec 12, 2008 2:27PM

@39:

How has the majority done managing their money? Your assumption is that portfolio theory is right. Mine is that it is wrong. Since most people are using it of course i'm going to be in the minority. I think 99.9% of "investors" are idiots, the last thing I want is to be in the majority (which is to say they don't understand the assumptions underlying their models).

Suffice it to say any argument that involves people being rational, risk being variance or markets being efficient are not going to convince me since none of those things are true, at least not demonstrably true.

42

Posted by guest , Dec 12, 2008 2:29PM

Should that surprise anyone? The SEC is useless.

43

Posted by guest , Dec 12, 2008 3:13PM

vol is king is a genius!

44

Posted by guest , Dec 12, 2008 3:15PM

VOL is King rocks...profound thoughts

45

Posted by guest , Dec 12, 2008 3:19PM

43 Yeah Vol is King is among the .1% that is not an idiot. Wonder why he's wasting his time here.

46

Posted by guest , Dec 12, 2008 3:45PM

VOL is King is up 9 inches YTD.. so STFU

47

Posted by VOL IS KING , Dec 12, 2008 3:52PM

@45:

Hatred for the rest of humanity? How exactly does one define a waste of time anyway? Just because its not how you would spend your time doesn't mean it doesn't put a little twinkle in my eye.

I spend all my time, trading options, thinking about economic / finance theory and avoiding human contact. Typing in this little text box saves me the trouble of actually talking to live people.

48

Posted by Anal_yst , Dec 12, 2008 4:39PM

haha VIK, been very entertaining today

49

Posted by guest , Dec 12, 2008 4:45PM

27 - All those hotshots are now streaming their CVs into the "second-rate" pension funds so they can still eat.

50

Posted by guest , Dec 12, 2008 4:47PM

27 - All those hotshots are now streaming their CVs into the "second-rate" pension funds so they can still eat.

51

Posted by guest , Dec 12, 2008 4:49PM

27 - All those hotshots are now streaming their CVs into the "second-rate" pension funds so they can still eat.

52

Posted by guest , Dec 12, 2008 5:21PM

VOlKing, darling: please do tell how you trade options on stocks with zero risk of loss? Or are you saying that you fix the max loss at a small and acceptable level?

53

Posted by VOL IS KING , Dec 12, 2008 5:33PM

Nah, its arbitrage, the volatility surface us self inconsistent. Options on the same underlying can't have different vol assumptions for the same stock, that would be silly.....

54

Posted by VOL IS KING , Dec 12, 2008 5:34PM

Nah, its arbitrage, the volatility surface is self inconsistent. Options on the same underlying can't have different vol assumptions for the same stock, that would be silly.....

55

Posted by guest , Dec 12, 2008 11:00PM

It says in the letter that they exercise their calls. I thought they sold the calls. Am I an idiot?

56

Posted by guest , Dec 12, 2008 11:25PM

Charlie Gasparino...you pathetic douche!

Anyone who is google alerting himself deserves to be abused at great lengths. Hey Charlie, I hope that bald fuck Liesman punches you in the face at some point. Ratigan should give you a cleveland steamer as an encore.

57

Posted by guest , Dec 15, 2008 2:59PM

Vol is King... "Options on the same underlying can't have different vol assumptions for the same stock"
are you serious or is that a joke? Do you really think that the stock prices move according to the Black-Scholes assumptions?

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