Why did Bernard Madoff let a large group of capital market veterans compete to flatter him and be deceived without realizing it?
Why are the victims of the "Madoff scam" all foreign banks and not a single American bank?
Why can he escape the supervision of various agencies?
On December 17, 2008, Bernard Madoff passed by Lexington Avenue in New York City, heading to his apartment.
Previously, he was released on bail with his $10 million apartment as security. Fifty-nine years after the death of Charles Ponzi, his name has been mentioned frequently by the global media again because of the former Nasdaq stock exchange.
Chairman Bernard Madoff used the "Ponzi Scheme" invented by Ponzi to create the largest financial fraud in the history of the United States.
On December 15, 2008, the media in New York and London began to use the term "Madoff Scheme" to describe the Wall Street financial scandal that had been exposed four days earlier.
"We usually use 'Ponzi scheme' to describe those financial frauds that take advantage of people's desire to get rich quickly, attract them to invest in a company that does not exist, and then transfer the funds by demolishing one wall to pay for the other. Maybe we should
Let's use a new term - 'Madoff scam'. According to public information alone, the amount involved in Bernard Madoff's case is as high as 50 billion US dollars, and the victims include sophisticated hedge funds, financial institutions and millionaires.
"Peter J. Henning, a professor specializing in white-collar crime at Wayne State University School of Law in Detroit, wrote an article.
The memory of eighty-eight years ago suddenly came back to life on the morning of December 12, 2008, when American hedge fund managers, bank executives and investors read from page A1 of the New York Times that on the morning of December 11, Bernard Madoff
They were shocked when news came that they had been picked up by the FBI for allegedly defrauding customers.
It is hard for them to believe that an old Jewish man with silver hair, a kind face, and who is deeply trusted by investors can be the biggest liar in the history of Wall Street.
In just a few hours, the news that "a securities giant was accused of defrauding customers" spread through the New York Times website to every corner from Washington to Tokyo, from London to Jerusalem. Spanish banking giants Santander,
BNP Paribas in France, Nomura Holdings in Tokyo, Japan, New Private Bank in Zurich, Switzerland and Union Bancaire Priv?e in Geneva, HSBC and Royal Bank of Scotland in the UK, Medici Bank in Austria, the world's largest
Listed hedge funds Germany's Man Group, Italy's UniCredit and Banco Popular, New York's Fairfield Greenwich Group, one of the largest hedge funds in the United States, Tramont Capital Management, Maxam Capital Management, the UK's
Bramdean portfolio companies, the New York Mets baseball team, the Palm Beach Country Club, the Prodigy Foundation, the director's charity of America, the humanitarian foundation founded by Nobel Peace Prize winner Eliezer Weiser... 1
A long list of prominent names was quickly associated with Bernard Madoff.
However, American financial commentators quickly thought of a name that Americans were familiar with 88 years ago - "Ponzi scheme."
On December 14, Robert F. Bruner, dean of the Darden School of Business Administration at the University of Virginia, wrote an article saying that the Bernard Madoff fraud case is a modern version of the "Ponzi scheme", which is similar to that seen in history.
Similar financial fraud cases have at least four characteristics: - The "hot market" provides them with rich soil.
A hot market often means rising asset prices, widespread optimism, weakened risk awareness, aggressive investment operations, and heightened enthusiasm for trading.
A large number of "rookies" swarmed into the market, and the madness caused investors to relax their vigilance.
——Plausible arbitrage trading methods are their magic weapon to attract investors.
Charles Punch told his investors that there was actually a large price difference between the international stamps in the United States and the international stamps in Europe, and he could obtain huge returns through arbitrage trading.
Of course, his investment plan is entirely based on specious assumptions.
The framers will only emphasize that there is a market that has not yet been fully developed, but will not discuss the details of the investment.
The reason they gave was that they had to keep it secret, otherwise it would attract the attention of other investors and steal their fruits.
——They are very good at using the complexity of affairs and information asymmetry to deceive investors, making it difficult for them to understand the truth of the matter.
"Believe me" has almost become a mantra used by all planners to paralyze investors.
——The turning point in the capital market is when the incident comes to light.
Once the capital market reaches an inflection point, investors will naturally start to care about their investment returns.
As soon as investors notice that returns start to decline, or don't meet their expectations, they ask in detail what happened, and eventually the scam is revealed.