Christmastime is the time of giving. So we can thank Bernie Madoff for giving Americans some special gifts this holiday season.
Yes, I said thank him. OK, maybe not a lot. But the one-time financial wizard’s downfall is a morality tale that provides so many lessons it’s almost impossible to know where to start.
If you’ve been living under a rock, the former chairman of the Nasdaq has been charged with securities fraud. Not just ordinary securities fraud, either. Reportedly, Madoff’s sons turned in their father, and who could blame them. He had allegedly confessed to them “that his investment business was a giant Ponzi scheme’ that cost clients $50 billion, a lawyer for the brothers” told Bloomberg.
How someone could degenerate from such status to being reviled the world over is a story that will soon fill textbooks with lessons for future generations. For starters, Madoff proves P.T. Barnum right. Barnum is credited with the saying, “There’s a sucker born every minute.” Given the world’s population growth, maybe that understates the case.
Besides, you don’t need 6.5 billion people when you know the right ones. Those right people lost $50 billion. The list of victims in this story reads more like a social register than a police report – New York Mets owner Fred Wilpon and charities for U.S. News & World Report Publisher Mort Zuckerman, Sen. Frank Lautenberg (D-N.J.) and Steven Spielberg.
It’s hard to think of such luminaries as “suckers,” but that’s about the size of it. A lot of business is based on trust and Madoff won the trust of the rich and famous. That’s a reminder that difference between rich and poor sometimes is merely the size of their mistakes.
According to The Wall Street Journal, nine of the victims had $1 billion or more under management with Madoff. Five of those were banks. Others included Tufts University, several pension funds and even The Elie Wiesel Foundation for Humanity. What kind of monster bilks a foundation started by a Holocaust victim?
Since we’re still figuring out the extent of Madoff’s alleged crime, we don’t know enough about him to say. But he’s also giving us a lesson in history, and there we might find some answers. Madoff’s purported crime was a form of pyramid scheme writ large – more commonly known as a Ponzi scheme.