Madoff: Corruption, Deceit, and the Making of the World's Most Notorious Ponzi Scheme

by Peter J. Sander

In the first comprehensive account of this epic scandal, Peter Sander traces Madoff’s rise from schoolboy to Wall Street trader, from money maker to money manager. His gripping narrative examines how Madoff built his brand by infiltrating influential circles, how the scheme came unraveled, and how Madoff—a Jew whose arrest has been called “fodder for the bigots”—ironically wreaked grievous damage to Jewish organizations in particular.

Genres: Business

272 pages, Paperback

First published January 1, 2009

Reviews

[Bethany · Rating 3 out of 5]

I should have chosen a resource written later in the game. I feel like the outcome of this died with Bernie and I need more deets.

Sander did all right, don’t get me wrong. He just published too soon. There’s quite a bit of soap box moments in this work as well.

[Douglas · Rating 4 out of 5]

A really good book overall.

The book does a great job about giving you a 360 degree viewpoint of the Bernie Madoff case. Ranging from why he did it to victims, impact on the economy, how the SEC should prepare better next time, how they let it slip, and how you can protect yourself from slipping into the same situation.

What I found interesting about the book was that Madoff made his fortune early trading penny stocks - stocks below $5. The rest was a little vague, but then he would provide incentives to other banks to direct trades to his market making company. From this he realized some trends and then helped to create the trading platform for one of the exchanges.

My question was, 'What is a guy that is so rich and successful doing a ponzi scheme like this?' After reading through all the theories, I am guessing that Madoff would keep 'robbing Peter to pay Paul' until he died. At which point the entire situation would have been revealed, but it wouldn't have matter to him. The fact that the market took a steep dive revealed his ponzi scheme because all the institutional clients and his other clients were scared about the market and, like a bank run, wanted redemptions on their accounts. Even with Madoff sitting on a large warchest, with too many demands he ran out of money.

What Madoff did that was clever to raise the funds was this: First after being so successful he would start out as a generous benefactor for like the Yeshiva University, then would then move him to an officer position or fundraising position, then a BOARD position, then with him next to them and in their ear, it wasn't hard for him to ask them, 'Hey, I have a successful track record, let me manage your accounts. Hows about $250 MM?' Another thing he did was make his investment organization EXTREMELY exclusive... everyone in the palm beach country club knew about his supposed high returns and would want in, but he would tell them all no. But Madoff would have reps at the club saying, 'Hey, I am in tight with Madoff, I can get you in...' A lot of people jumped at this opportunity.

Madoff was a *great* salesman. He did not have a saleman approach and that is what I think was so clever about Madoff and how he was able to use that part of his personality to beguile clients to giving him money.

The book was written in business form. Straight to the point with relevant articles and supporting evidence to give you background information. For someone like me, business minded and wanting to learn more about this situation, this was a great read.

I would give it 5 stars, but I've read other books that were more inspirational.