Friday, December 12, 2008

Madoff arrested, charged; may be facing $50 bln in losses: FBI - MarketWatch

When it rains it pours! As if investors didn't have enough to worry about, you can now add whether their fiduciaries are not only investing poorly, but whether they are ripping them off completely!

Madoff arrested, charged; may be facing $50 bln in losses: FBI - MarketWatch:
"Bernard Madoff, former Nasdaq Stock Market chairman and founder of Bernard L. Madoff Investment Securities LLC, was arrested and charged with securities fraud Thursday in what federal prosecutors called a Ponzi scheme that could involve losses of more than $50 billion."

It is still way too early to know how big this is (and early market reactions have been sort of a yawn), but as with most things dealing with Hedge Funds, it could be very explosive. This is espcially true since it hits them when already weakened by the market downturn (to say the least) and credit crunch. "

At SeekingAlpha, Michael Panzer quotes Real Money's Dough Kass:
"...alleged massive fraud at a well known investment firm could be "the biggest story of the year." In his view,

'It is bigger than Enron, bigger than Boesky and bigger than Tyco.
It attacks at the core of investor confidence -- because, if true, and this could happen ... investors might think that almost anything imaginable could happen to the money they have entrusted to their fudiciaries."

Stay tuned, we assuredly have not heard the end of this.

(And a note to my students, sign up now to do the case study in the spring! I have no doubt it will be a big one! Will be offered on a first come first serve basis)

1 comment:

Bill M said...

The entire stock market is a big ponzi scheme at this point, nothing is real and everything is being based on especulation.