Too Good to Be True: The Rise and Fall of Bernie Madoff

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Too Good to Be True: The Rise and Fall of Bernie Madoff

by Erin Arvedlund

3.06 · rating details · 54 ratings · 19 reviews

Despite all the headlines about Bernard Madoff, who pleaded guilty to running a $65 billion Ponzi scheme, he is still shrouded in mystery. Why (and when) did he turn his legitimate business into a massive fraud? How did he fool so many smart investors for so long? Who among his family and employees knew the truth?

The best person to answer these questionsand tell the full...moreDespite all the headlines about Bernard Madoff, who pleaded guilty to running a $65 billion Ponzi scheme, he is still shrouded in mystery. Why (and when) did he turn his legitimate business into a massive fraud? How did he fool so many smart investors for so long? Who among his family and employees knew the truth?

The best person to answer these questionsand tell the full story of Madoffs rise and fallis Erin Arvedlund. In early 2001, she was suspicious of the amazing returns of Madoffs hedge fund, which no one could explain. Her article in Barrons, based on more than one hundred interviews, could have prevented a lot of misery, had the SEC followed up.

But almost no one was willing to believe anything bad about Uncle Bernieso nice, so humble, so generous to charities. As Arvedlund shows, Madoff was no ordinary liar, but a master of the type of lies people really wanted to believe. He kept his clients at a distance and allowed handsomely paid friends to solicit new ones for him; playing hard to get created an irresistible mystique.

Now, Arvedlund tackles the tough questions that are still unanswered in the wake of Madoffs collapse:

Did he start off as a legitimate money manager or was he a fraud from the beginning? Were there indications of larceny at the very start of his career?
Why did Madoffs biggest supporters within the industry, such as Walter Noel of Fairfield Greenwich and Ezra Merkin of Gabriel Capital, ignore the warning signs that were so apparent? Did they choose to remain ignorant as long as their commissions rolled in?
Why did SEC investigations fail to catch Madoffs Ponzi scheme even though several people had voiced concerns about his operation?
Who else helped Madoff carry out his scam? His family and close associates have denied any involvement, but was it possible for one man to engineer a heist of such scope?

With her keen investigative eye, Arvedlund presents a sweeping narrative of Madoffs careerfrom his youth in Queens, New York, to his early days working for his father-in-law, to his time as chairman of the NASDAQ exchange, and finally to infamy as the worlds most notorious swindler. She offers a riveting glimpse of Madoff the manan indifferent student with little ambition who transformed himself into a star with a talent for trading, a reputation for innovation, and an unmistakably erratic nature.

Readers will be fascinated by Arvedlunds portrayal of Madoff, his empire, and all those who never considered that he might be too good to be true.(less)

Hardcover, 320 pages

Published September 8th 2009 by Portfolio Hardcover (first published 2009)

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Jul 29, 2011

Pearce Handrick rated it

This was Arvedlund's first book and it does have many problems that one would expect from a new author. Her editors did a very shoddy job of helping her tighten it up. Leaving aside the subject matter, the chapters feel unguided, there are huge chunks of repeated material that leave one feeling a sense of deja vu, and she often neglects to define a word or acronym in an early chapter and then will do so in a later chapter, which makes for distracting and difficult reading.
While no one wil...more

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Dec 28, 2009

S rated it

Recommends it for: People interested in current events

Shelves: true-crime, business

It's been a year since Bernie Madoff's Ponzi scheme was exposed, revealing that for years, Madoff had gotten away with scamming thousands of people around the world out of billions of dollars.

I had never really been interested in Madoff before, but I recently saw a documentary about the scandal which piqued my interest and out of the three books about Madoff at my local bookstore, I chose this one to read.

The book spans Madoff's entire life, from his childhood to his arre...moreIt's been a year since Bernie Madoff's Ponzi scheme was exposed, revealing that for years, Madoff had gotten away with scamming thousands of people around the world out of billions of dollars.

I had never really been interested in Madoff before, but I recently saw a documentary about the scandal which piqued my interest and out of the three books about Madoff at my local bookstore, I chose this one to read.

The book spans Madoff's entire life, from his childhood to his arrest on December 11, 2008. The most emphasis, of course, is on his years spent running his super-secret phony hedge fund. How long the scam actually ran is still a mystery, but most believe it was at least 10-12 years and probably more. Madoff himself said very little in his allocution that would explain how long the scheme had been in place or why he began it in the first place.

Admittedly, much of the financial jargon was beyond my understanding. Options, calls, puts, split-strike conversions -- these are the things Madoff's magic formula were supposedly made of. And while I never quite grasped just how it all worked, the gist was this: Madoff made money off of other people's trust, gullibility, and greed. The bottom line was that his scheme worked because people were either too lazy to do the proper digging or too afraid to dig too deep for fear that their cash cow would dry up.

Arvedlund does a great job of documenting the extent to which Madoff's scheme permeated the financial world. Many times, the people who lost everything to Madoff didn't even know he controlled their money. The complexity of the scheme was impressive and also makes it increasingly hard to believe that Madoff orchestrated the entire thing on his own as he claims.

The saddest part of the story, besides the fact that so many people lost everything (and my sympathy goes out to those who didn't know they'd invested with Madoff and not those who turned a blind eye to Madoff's actions because the money was good), is that Madoff had a highly successful legitimate broker-dealer business that had given him the good reputation on Wall Street that he used to lure in his prey.

Overall it was a fascinating account of how one man robbed thousands of Peters to pay basically one Paul -- himself. Arvedlund's writing style is clear and concise and she does a decent job of connecting the dots. She also bookends the chapters with Madoff's arrest and allocution (Introduction) and his sentencing (Epilogue), which I found effective in bringing the story full circle.

However, there was never a solid timeline and a lot of the events covered in the book jumped around in time. I found it hard to align them all in my head. Not to mention, there is a glaring lack of WHY in the story, though this isn't Arvedlund's fault. Madoff himself has never really offered a motive beyond his lame explanation that it all started after he suffered a loss, was too embarrassed to admit it, used the scam to cover his losses, and just let it continue for years. I personally don't buy it, but I don't think we'll ever really know the truth.

Madoff was ultimately sentenced to 150 years in prison. For a 72 year old man, the sentence is purely symbolic and does little to provide justice to his victims.(less)

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Sep 07, 2009

Lobstergirl rated it

Recommended to Lobstergirl by: New York Times

Shelves: business-finance

Much remains to be known and revealed about Madoff's giant Ponzi scam, but this book is a very good start. Arvedlund wrote an article for Barron's in 2001 wondering about Madoff's success but didn't follow up in the intervening years. Using news reports, court filings, Congressional testimony, and interviews with people who either knew or observed Madoff (but none of the true insiders), she compiles a fascinating narrative of Madoff's businesses - one legitimate, the other a phony "hedge f...more

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Sep 25, 2010

Brooke rated it

· review of another edition

Shelves: non-fiction

This book was very hard for me to get through. After getting nearly half way through, I set it aside for about six months. There is just a lot of technical detail - not hard to understand, just very dry - that made it a chore to get through the book.

That being said, this is a very in depth look at the Bernie Madoff scam and makes it clear why a fraud of such magnitude was able to occur.

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Jan 12, 2010

Jack Lehnen rated it

I sort of got into the Madoff thing, it appeared there were plenty of books on the shelf after the incident . Everybody was a Bernie expert I guess .

This book was very detailed. Probably more than anybody but a Wall Street analyist cares to read about . If you work on wall street or are an investment broker your name is probably in here . She goes on and on with name after name and every backstory that nobody really cares about unless you know the people .

She could have ...more

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Dec 07, 2011

TC rated it

Shelves: white-collar-crime

This is an encyclopedic volume that fills in a nice hole of the Madoff literature: instead of being all about him and his sociopathic abilities, as many books on the case are, it instead talks at great, documented length about the numerous "enablers" who helped funnel all that money to him in the first place. There is a lot of detailed information here for anyone wondering, "who were these rubes that took millions of dollars in fees from Madoff while mindlessly funneling him other...moreThis is an encyclopedic volume that fills in a nice hole of the Madoff literature: instead of being all about him and his sociopathic abilities, as many books on the case are, it instead talks at great, documented length about the numerous "enablers" who helped funnel all that money to him in the first place. There is a lot of detailed information here for anyone wondering, "who were these rubes that took millions of dollars in fees from Madoff while mindlessly funneling him other people's money?"

Likewise, for anyone wondering why something so big could go on for so long without detection, there is plenty of evidence that many, many people knew that Madoff's "hedge fund" was at best shady, and at worst a fraud. One banker from Toronto figured it out after just fifteen minutes of talking to Madoff. His many supporters were happy to turn a blind eye, since they were getting plenty of benefit from doing so.

Because this is a book more about the large circle that fed Madoff, rather than about him per-se, this is probably not the book one should start with if reading from scratch on the scandal. For that, try The Madoff Chronicles: Inside the Secret World of Bernie and Ruth or Madoff with the Money. If you're still interested, then tackle this book.

The one main irritation of this book is it is very repetitive--the author repeats some of the same basic information over and over, and over. It would have also been nice to be provided a cast of characters to refer to in an appendix or elsewhere, as there are a lot of names here (though I suppose this is one place her repetition actually helps). Because she deals with the various personalities and their acts more-or-less individually, the timelines often overlap, which can add to the confusion.

Those shortcomings aside, this book does a great job showing that, regardless of Madoff's claim that he "acted alone," in reality there was a large ensemble who were more than willing to be kept fat, dumb, and happy by him who arguably did the bulk of the damage in perpetuating the fraud amongst many communities. It also clearly shows just how unsophisticated many "sophisticated" investors really are, doing business on a handshake with a golfing partner and no due diligence.

Finally, this book makes one very clear argument that I have heard nowhere else, and I think it bears calling out: it's well-known that in addition to this Ponzi scheme, Madoff ran a legitimate market-making operation (or more precisely, his sons did). It has often been parroted that that business provided a great cover for Madoff, as he would parade potential clients and even auditors around the trading floor, making it appear that this is where all the money for his hedge fund was being made (when in fact it was being made in a grungy space on the floor below by a group of hacks who back-dated trades on paper). It was also this trading business that gave Madoff stature as a pioneer in electronic trading (leading to his two-term tenure as head of the NASDAQ). Most are willing to give Madoff the benefit that this business was on the up-and-up.

But this book makes the case that, if anything, it was Madoff's need to fund this business with off-book money that led to him starting the hedge fund ponzi in the first place. This is an interesting theory. And even if it proves speculative, it is very much documented here that this trading business is what enabled all those feeders who knew something was up to think that this was Bernie's magic: that he made those consistent profits year after year by using his trading floor to engage in the illegal (but hard to detect) practice of front-running. The upshot is that even Madoff's "legitimate" business was, arguably, just as much a part of the scam.(less)

· see review

Sep 23, 2009

Susan rated it

This book was interesting and a real eye opener to how intelligent people can get roped into a Ponzi scheme. It is interesting the secrecy around Madoff's illegal business and the phony financial statements he producted for his investors to help make it survive. It was just when stocks were going down and everyone wanted their money that his world came tumbling down. I also learned about the feeder funds whom sought out clients for Bernie. Also, it was interesting that many of the investors p...more

· see review

Mar 31, 2010

Anita added it

I tried to read this under it's other title "Madoff: The Man Who Stole $65 Billion". I was confused about whether they were two different books, but Boffins web site says
'First published in the USA under the title, "Too Good To Be True" '
I couldn't get much past the first chapter, but it's likely that this is due to my failings rather than the book's.
So, I'm not going to give this my rating (which would be 2 star).
Because Bernie didn't testiify in co...more

· see review

Dec 08, 2010

Mike rated it

Shelves: financial-business, non-fiction

It's not easy to get in with the rich but once you do, and you have their trust, you can do practically whatever you want. His clients ran the gamut from mega-rich (who most likely knew better) to little people (who wouldn't even know what questions to ask).

The crazy thing is Madoff was plenty talented and successful in his legit business. He was ahead of the game on computer trading and fast automation which is the way it's all done now.

And, some of these rich guys were ch...more

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Nov 16, 2009

Barbara rated it

Recommends it for: high finance geeks

Recommended to Barbara by: Jeanne

Shelves: non-fiction, true-crime

Although a fascinating topic, the author presented the material in a very disjointed and scattered manner with a tremendous amount of repetition. In some instancs I found myself going back a page or two thinking I was rereading pages only to find material being repeated that very closely resembled what I had just read.

This author wrote a very important article in Barron's regarding the Madoff case. I can only say that each chapter in the book feels like a totally separate article...more

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Aug 18, 2010

Oldesq rated it

Shelves: 2010, madoff

While it is true that Erin Arvelund does not make claims about who she interviewed or what sources she spoke to for this book- one assumes that at least some original journalism would have been done for this retelling of recent events. Instead, in my opinion, the book is really a survey of other's work. Paragraph upon paragragh reads "As he told Vanity Fair", "was quoted by website" and "according to an interview."

The Harry Markopolus book No One Would...more

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Mar 09, 2010

Sheryl rated it

Audio. Such a remarkably interesting book. It really gets you mad to see what one person can do to hurt so many other.

I did feel that the book could have used more editing. There was a lot of very repetitive passages. The some of the details I thought may have been better in footnotes to improve the flow of the story and make the book more readable.

· see review

Apr 25, 2010

Cathy rated it

Amazing how Madoff was able to pull of his Ponzi scheme and the number of people of only saw what they wanted to see: a financial genius. Madoff could possibly have continued indefinitely even the economy hadn't soured. By appealing to greed, ego (the exclusivity of his clients) and providing unnatural returns he prevailed.

· see review

Sep 03, 2011

Krys Gut rated it

· review of another edition

Shelves: non-fiction

I agree with readers the author was repetitive and included unnecessary information, but her accounting of the facts appeared well researched. It would have read better if we had more insight into Madoff's head, but understandably this was not available.

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Feb 05, 2012

Jim O'shaughnessy rated it

How he managed to con so many people is still beyond me.

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Aug 10, 2010

Herb Blank rated it

Interesting expository on the anatomy of a Ponzi scheme

· see review

Dec 28, 2009

Ang rated it

the man who stole $65 Billion

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Nov 21, 2009

Debby rated it

The number of hedge funds and the repetition make your head spin. I seriously wonder how he "did this alone".

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Feb 22, 2011

Zach rated it

· review of another edition

Copious grammatical and spelling errors with little substantive content. This book sucks balls.

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Feb 08, 2012

william marked it as to-read

Jan 30, 2012

Shannon marked it as to-read

Shelves: ebook, biography, current-events-pundits

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Jan 15, 2012

Ermalinda Horne rated it

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Jan 01, 2012

Chris rated it

Jan 01, 2012

Madame marked it as to-read

Dec 16, 2011

Stephen Larsen marked it as to-read

Jan 15, 2012

Amanda rated it

Shelves: started-but-never-finished

Nov 25, 2011

Gitte marked it as to-read

Shelves: real-life-stories

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