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Thursday, March 05, 2009

Winners, Losers

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1 comment:

jimf said...

From a _Fortune_ magazine I was leafing through the other
day at the laundromat (the only place, I'm afraid, I ever
read _Fortune_ magazine).

(via http://securities.stanford.edu/news-archive/2009/
20090105_Headline109262_Sloan.html )
----------------------------
Don't Blame The SEC, You Shouldn't Expect Regulators
To Catch Bigtime Financiopaths Like Bernie Madoff -
That's Not How The World Works.
by Allan Sloan
_Fortune_, January 5, 2009


Yes, there really are times when life imitates art. A case in point:
the Bernie Madoff scandal, in which the disgraced investor bears a
startling resemblance to Zero Mostel's sleazy theater promoter in
one of my favorite flicks, "The Producers." What do the real-life
Madoff and Mostel's fictional Max Bialystock have in common? They used
the same principles to pull off a big-time financial fraud. These are:
If you're going to steal, steal big. If you're going to cook the books,
make up numbers of your own - don't try to doctor the real ones. […]

How could the Securities and Exchange Commission, which admits it
had gotten tips about Madoff for years, bring some penny-ante insider-trading
claim against Dallas Mavericks owner Mark Cuban while failing to see
that Madoff was ripping off billions from the likes of Elie Wiesel's
foundation? Not to prejudge the SEC's investigation of itself, but I'll
bet the answer will turn out to be that things have always been this
way and probably always will be. If commission enforcers get a bigger
budget and are treated with respect rather than being dissed (including,
I'll bet, by some of Madoff's victims) as an obstacle to free markets,
things may improve. But don't expect a fraud-free era to ensue. I'm
saying this not out of cynicism but because I know how regulators
generally work. I've seen it for years, in fields ranging from
department stores to oil-drilling partnerships. You're likely to
get caught if you run a few inches outside the baseline, because
regulators are set up to catch that. But run so far out that you're
playing on a whole different ball field? You can get away with
that if you're enough of a financiopath, and your luck holds.

7:55 AM

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