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Tuesday , September 21 2021

The ‘honest’ Bernie Madoff

Bernie Madoff was considered a financial wizard during his time, a highly influential figure and what Albert Einstein said about the difference between genius and stupidity that there are limits only to genius came true.

Bernie Madoff began his career in the investment world in 1960. He founded a penny stock brokerage in 1960, which eventually grew.

The famous financial crisis occurred in 2008, so some people who had invested with Bernie demanded to withdraw their money which was more than $7 billion. His situation was revealed, and it turned out that he was the biggest fraudster known to mankind in history and because of him people lost $65 billion dollars in one day.

Bernie Madoff was fair in his dealings, ruthless to no one, and equal to all. He robbed all his friends, and his closest Jewish relatives.

He stole the money from the Jewish charity of which he was once the president. He also stole the savings of the renowned Jewish director Steven Spielberg, and other celebrities, in addition to British and Scottish banks, the huge Japanese Bank of Namura, and money-holding companies, in addition to stealing the savings of farmers, workers, mechanics and teachers.

With the collapse of his company many of his investors committed suicide; many others went bankrupt — individuals and companies. His son committed suicide, and later the second son died of cancer.

Bernie was sentenced to one hundred and fifty years in prison, of which he served 11 years and was released a year ago and died a few months later.

Thirteen years after the scandal broke out, we can see the basic principles under which Bernie operated which made it difficult to discover his fraud, until the external crisis occurred in 2008.

Bernie kept clear records and made sure that his every client received their account statements on a regular basis, albeit not true.

He also made sure that all requests to withdraw funds, whatever their amount, were met with great ease. He kept a very good investment transaction history, and simply continued to multiply his gains at a rate of 10% annually, year after year. He wouldn’t pay more even if the market had gone up by a much larger percentage.

His success not only relied on human greed, but also on the stupidity of his clients, and the overwhelming desire of some to make a quick profit, knowing that most of them were not in a hurry.

He also followed the policy of excessive cruelty in not excluding anyone from his nets, even his most loyal friends, as well as looting the money of his colleagues, and the funds of the university endowment, of which he was chairman of the board of trustees.

Nicolas Gomez Davila said, “Intelligence isolates individuals, but stupidity gathers crowds.”

e-mail: a.alsarraf@alqabas.com.kw

By Ahmad alsarraf

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