In his first interview since his arrest in December of 2008, Bernard Madoff tells the New York Times, “that unidentified banks and hedge funds were somehow “complicit” in his elaborate fraud, an about-face from earlier claims that he was the only person involved.”
The article notes that during the private two-hour interview, Madoff went on to say, ““They had to know, but the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know,” and yet he did not say “that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth. Rather, he cited a failure to conduct normal scrutiny.”
The interview and the research conducted were part of the reporter’s leg work for an upcoming book, “The Wizard of Lies: Bernie Madoff and the Death of Trust,” out for publication this spring. You can read the full length article here.
Clearly, this case only serves to reinforce that the importance of operational due diligence before any investment is made is paramount. Most due diligence professionals would have identified problems with investing in Madoff Funds. Since Madoff...there has been more awareness of the need for strong due diligence. To explore more related topics and test your knowledge in the Due Diligence Challenge, join us at the 6th Annual GAIM Ops Cayman.
Let us know what you think: Do you believe Mr. Madoff?