Just one big lie
Bernard Madoff, deviser of the biggest Ponzi scheme in history, died in prison on April 14th, aged 82
It was rare for Bernard Madoff to invite anyone to his investment-advisory office. Almost all the employees in his brokerage firm, Bernard L. Madoff Investment Securities, were kept out of that part, and had no idea what went on inside. The door was locked.
Like his other offices, it was immaculate, with a starkly modernist decor of black, white and grey.
When he caught one of his employees eating a pear there, dripping juice onto the grey carpet tiles, he immediately ripped out the stained tile and laid another. No sloppiness allowed.
He set the tone himself, in a Savile Row suit with his wedding ring, gold or platinum, exactly matched to the wristband of his vintage watch of the day. All was done with elaborate care, including the handling of other people’s money.
A very simple scheme ensured that, come what may, his private clients received compound average annual returns of a steady 15% on their investments.
It worked so well that despite the recession of the early 1990s, the financial crisis of 1998 and the September 11th attacks, savings sent to him inexorably grew, as if by magic.
Everyone wanted to know how it was done, and he was not about to tell them. If they pressed him he would say it was a proprietary strategy, with details not to be discussed. This was a private fund, secret and exclusive; what went on there was no one’s business. Clients loved that special feeling.
Their funds would be diversified, they learned, across solid property, blue-chip stocks like Intel and Coca-Cola, Treasury bonds. He knew the ways of the market inside out; he had even modernised it, helping to launch the first electronic stockmarket, Nasdaq, and becoming its chairman. He was famously respected on Wall Street. All that, and he charged no commission for his money-management services! He was happy, he would say, just to earn commissions on the trades.
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