I've been in this racket (managing $$ and mkt risk) for over 20 years, and this instance is greed personified. The fact that no one, NO ONE of any substance seriously looked into the ridiculous returns that Madoff openly bragged about and advertised, leads me to believe that because of his resume (Madoff was a former NASDAQ Chairman, among other things) he got away with this scheme because the regulators were intimidated by his reputation, and the investors were swayed by delusional dreams of excessive returns. The most frustrating aspect of the fallout from this scandal will be the regulators trying to cover their respective @$$es now by crying for more and more oversight regulations, when in fact, if anyone had used what the SEC already has on the books, none of this would've happened in the first place. My industry needs more regulation like a junkie needs more dope. If I take a client/prospect golfing, shooting, or to a track day event, I have to jump through numerous and ridiculous hoops to make sure I don't spend too much on the event, or that a vendor doesn't contribute to the event, in a manner that could be perceived to be buying or gifting to the prospect/client. The limits are typically $100/client/prospect, which at many places will bearly get you a decent meal. Yet Madoff was allowed to run roughshod over all the rules in place, primarily within his own affinity group, and all the regulators, who were concerned about his actions for over TEN YEARS, did nothing. In the end it was Madoff's (pronounced like Made Off, which is exactly what he did with everyone's money) own hubris that did him in, slipping up telling his own son's that the program was nothing more than a huge "Ponzi Scheme."
He'll rot in jail because of it, but I can guarantee no regulatory good will come from it either.
