On MSNBC earlier, Arianna Huffington made the point about how badly the SEC had failed in this case, and that basically, while Madoff was bilking people out of billions, the SEC was hounding… Martha Stewart.
Also, I’m wondering when the Goldman Sachs criminal investigations are going to start. I’m heading to the bookstore right now to get Taibbi’s new take in Rolling Stone, since Rolling Stone sucks hard and refuses to go online with the stuff people actually want to read. In fact, rather than reward them, I will go to the library instead.
scav
Empathy Wins! closely followed by Life for Madoff does make me giggle though. I’m not sure its happiness.
Comrade Stuck
Sentenced to 150 years
He’ll be getting out about the time Iraq becomes a western democracy.
Zifnab
Couldn’t happen to a nicer guy.
Bruuuuce
Not even close to justice, as long as Madoff can only repay pennies on the dollar. But it’s loads better than the measly twelve years his side requested.
Martha did need to be investigated, not so much for her insider trading, but because she did her stuff while a director of the NYSE. (Much as Sanford ought to resign or be removed from office, not for having had an affair, but for having left his post with no notice.) The SEC ought to have been able to handle multiple investigations simultanously; I don’t know whether it was due to a manpower shortage or a lack of volition that they failed to nail Madoff.
John Harrold
I’m confused. Do you have a subscription to Rolling Stone and they won’t let you access the content via the internet? Or are you upset that they wont give you the content for free on their website? If it was the former, then of course you can just ignore the rest of this because I agree with you. If it’s the latter:
I’m all about the new media and all that, but don’t magazine folks have to make a buck? I mean it’s nice that some folks give their content away for free, but it’s really their choice. I’m certainly not going to condemn them for not doing it. Disruptive technology can really make it difficult to develop business models during the transient period.
I mean I really like the Atlantic blogs, and I got a subscription so that they could earn some cash and continue to fund things like Andrew Sullivan’s green redecorations. The places that produce content we like need the money right now, and buying Rolling Stone my end up helping Taibbi keep his job.
Little Dreamer
Madoff is currently taking his last walk in the free world. You bilk people out of billions of dollars, you get to spend the rest of your life behind bars. He should have thought of that previously, huh? I wonder if it was all worth it to him now?
Comrade Stuck
He’ll likely die soon in prison from a Caviar Deficiency.
Punchy
I call shenanigans. They don’t allow dogs in libraries, and the library is neither a dogpark nor a Rails for Tails, or whatever. Therefore Cole cannot go to this place. Also, the cat may eat the house while he’s away; by all appearances, it’s happened before.
As for Madoff…well, he Made Off, or at least his fam did. They’re still living in opulence.
Perry Como
Or you can find it here.
PeakVT
Madoff stole about 1,100,000 median households’ annual income. 150 years doesn’t seem like enough.
dmsilev
There was an article in the New York Times over the weekend that made much the same point. They interviewed some people who were prosecuted multiple times, and received multiple acquittals, and were nowhere near being even an order of magnitude within Madoff.
-dms
David
@Little Dreamer: He’s already in jail, and has been since March, I think. He’s as free as he ever will be, and will only have memories from here on, that and caviar withdrawal as noted above.
Maybe this has some deterrent value, but who knows. I would rather he pay the money back. Maybe this is a ploy to force him to disgorge the money from numbered bank accounts.
guster
@John Harrold: No, they don’t need to make a buck. Charging for content is wrong. Because ‘New Business Paradigm,’ that’s why!
gary
Jesus, buy Rolling Stone! They have a lot of good articles, and put many online (RFK, Jr’s election fraud article, the Howard Hunt JFK assassination article) but can you blame them for wanting to sell copies? They’re not a nonprofit. How can they publish good articles like these if they can’t turn a profit?
Blue Neponset
Fresh Fish!! Fresh Fish!! We’re reeling ’em in today!! Ha! Ha!
Are you taking bets today DougJ?
Bill E Pilgrim
Better late than never I guess.
The fact is, no matter how many years they throw at him now it doesn’t do a thing for most of the people who were destroyed by this, including at least one I know, and it most definitely wasn’t someone who could afford it, this was his fairly meager life savings from making great documentary films, all gone now.
The only thing that would have helped them is if those in charge of investigating these things had actually, you know, done so.
The right wants to spin this as one lone evil blah blah blah, rather than basically what happens when you let people do whatever they’re tempted to do. The whole financial system was a scam, IMO.
br
Hey John,
Here’s an even lazier way to flip Rolling Stone the bird: Barry Ritholtz scanned the article and posted a pdf.
LD50
Tying him to a car bumper and dragging him probably wouldn’t pass constitutional muster.
syl
The SEC is frighteningly incompetent. I attended a deposition there once where the SEC lawyer spent 15 minutes incredulously questioning a witness about interest rates. The SEC lawyer could not understand why a bank would recommend or anyone would buy a bond with, say, a 4.0% interest rate when one with, say, a 4.5% rate was available. The witness tried to explain about risk and portfolio management and whatever but the SEC lawyer kept going, thinking he had uncovered a grand conspiracy and sounding a lot like Dana Milbank did yesterday. But hey, maybe it’s elitest of me to expect the primary regulatory body of stock and bond markes to have a cursory understanding of stock and bond markets.
Bill E Pilgrim
The other Taibbi money quote second only to the squid line is this heading:
Little Dreamer
@David:
Sorry but I don’t see your point. Madoff had to take a walk in the free world to report to court today. There will be no more walks in the free world, he will never have any reason to walk in the free world again since he will never be eligible for parole, therefore my point still stands, no matter HOW long he’s been sitting in jail previously. From the moment he goes back into prison, he will never see the free world again.
Napoleon
Taibbi’s article is brutal. As soon as the Rolling Stone showed up in my mailbox Saturday I ran to the backyard with it and immediately read it on my lounge chair. When I was done I wanted to take a chain saw to anyone who had ever worked for Goldman Saks.
BTW, OT for everyone who gets the Rolling Stone, how about the headline on the Michael Jackson piece which was written and printed before he died. Talk about poor timing with a headline.
The Moar You Know
@Bruuuuce: Madoff having relatives in the SEC’s executive management might have had something to do with it.
El Tiburon
JC, you are a rebel!
I can picture you rolling up into that libarary, smokes rolled up in your t-shirt sleeve, hair slicked back, leather jacket, attitude.
You’re all like, “gimme my goddamn rolling stone biotches!”
kay
@syl:
It would seem to me that a lot of small investor’s confidence is grounded in trust.
I simply don’t understand Wall Street, or the regulatory agencies. I don’t understand why they would continually discredit themselves. They are held up as uber-capitalists, yet they flagrantly lie, cheat and steal, over and over and over.
At what point do small, less sophisticated investors simply stop trusting them? Is that even a concern?
Do they not need customers? If not, why not? What kind of business squanders its most important intangible asset, trust?
DecidedFenceSitter
Lawyer friend of mine linked me to Everything you Need to know about the Madoff sentencing and what this sentence means. Actually he linked to it before the sentence came down, so it is all that more useful in retrospect.
kay
Maybe they count on a new crop of small investors who don’t remember these perp walks.
How large is that group? There must be like an average 9 year spread between these massive fraud cases, or has been in my lifetime.
Is that really a business model? New crop ‘o suckers?
Bill E Pilgrim
@kay:
They were interested in trust without a doubt, but small investors was not the group they were worried about gaining it from.
There was a PR campaign by the SEC of being a “partner” with Wall Street during the boom years, that was the image they pushed. I heard an interview with an ex-official who was very critical of that approach now.
Bruuuuce
TMYK @23: That sounds like a lack of volition to me. Not to mention some conflicts of interest, and a real problem in hiring.
The Moar You Know
The Taibbi article in Rolling Stone is truly terrifying. I think I’m going to sell my house and go live in a tent in the desert until this nation comes to its senses.
Brachiator
I don’t know. Is that enough time? I would have tacked on a few more years.
Stewart deserved to go to jail. She was a former stockbroker who knew the rules. Funny how no one is crying tears over an male assistant who is also doing time.
Ponzi schemes are tougher to catch because the crook does much to make himself look respectable. And the suckers are reluctant to look closely into their apparent profits.
Comparing Madoff to Stewart is an easy waste of time.
On the other hand, it is amazing how accurately Charles Dickens described the well-connected fraudster in his depiction of Mr. Merdle in Little Dorrit.
By the way, if I were the Treasury Secretary, I might make Madoff’s prison life more comfortable if he helped contribute to regulatory practices that would help prevent people like him from prospering.
kay
@DecidedFenceSitter:
Thanks. I’m glad he isn’t going to a minimum security prison. He spent close to a million dollars on golf course memberships, and he took it directly from client accounts. He should probably not play golf.
syl
@kay:
Well, a lot of it is who you deal with. As a small investor I probably don’t interact with CITIBANK or BANK OF AMERICA or CHASE. Instead, I interact with Bob, my financial advisor who also happens to work for or closely with one of those behemoths. So, while I may not trust Citi, Bank of America, etc., I do trust Bob, and the big banks can get a lot of mileage out of that. Because, really, the banks don’t care that much about any individual’s account. Even if I’m rich and have $1,000,000 invested with them, that’s still nothing compared to any single institutional investor. The only problem for them would be if a huge group decided to leave simultaneously. That’s what people like Bob are supposed to guard against.
kay
@Bill E Pilgrim:
That was part of a broader theme, of regulatory/government/business “partnership” that was absolutely accepted without question, all the way down to the local school board level, it changed just in my lifetime, and now seems completely insane, as a concept.
What baffles me is that it doesn’t seem like good business practice. If I’m a small investor I want protection from more sophisticated entities, because I know there’s no real financial incentive for the for-profit entity to worry too much about my pathetic savings.
Jeebus. I’m not getting involved with this high finance stuff if I’m low-hanging fruit for the Big Greedheads. I’ll get killed.
mey
“THE GREAT AMERICAN BUBBLE MACHINE” is a must read. It may make you puke in your mouth a little though. (Can be found online, just google.)
Bill E Pilgrim
@kay: Well, exactly on the money, no pun intended, with your high-flying low-hanging opposition (nice BTW). The answer is that people were used as fodder, that’s the whole charge against this crew, even by people like Jon Stewart who nailed whatshisname to the wall about exactly that. It’s pump and dump writ large and institutionally sanctioned, and those who know how to do it make money no matter which way things go, often because they’re the ones who made it go that way.
Of course to Republicans it was called simply “the magic invisible Jesus hand of the unrestrained free market”. If you squinted just right, you could see it in your morning toast.
kay
@syl:
Good point. There’s a local face, and that’s where the trust comes in. I do know that they don’t give a rat’s ass about my life savings (such as it is). My assumption was they might care if we all figured that out, but apparently it doesn’t matter, because we don’t control a zillion dollars, so who needs such loser customers?
It seems like a wonderful opportunity for an entity who actually do care about my measly life savings, though. Or behave in such a way that I believe they care if I lose trust and take the money elsewhere.
Mike G
At what point do small, less sophisticated investors simply stop trusting them? Is that even a concern?
Individual investor participation in the stock market has been declining for years, and is at generational lows. As with all of corporate America, all they give a shit about is maximizing short-term profit by screwing people as far and as frequently as they can get away with. If small investors leave in disgust, well, there’s always more to be roped in, and their volume of money wasn’t significant anyway.
The SEC lawyer could not understand why a bank would recommend or anyone would buy a bond with, say, a 4.0% interest rate when one with, say, a 4.5% rate was available. The witness tried to explain about risk and portfolio management and whatever but the SEC lawyer kept going, thinking he had uncovered a grand conspiracy
Another fine product of Regent University, perhaps. Bush’s little time bombs planted in the federal government.
John Cole
@John Harrold: Put the damned thing online and let me pay for it there. Why do I have to get a dead tree version?
kay
@Bill E Pilgrim:
The SCOTUS case today that won’t get any attention is important regarding the general regulatory/police issue, and I thank Cuomo for bringing it, although he lost.
The SCOTUS said state attorney’s general need more than state law to look at the books at national banks, although those national bank’s lending practices have a direct impact on real property (real estate) located within the state.
New York was joined by 49 states. The national banks still won.
I think the decision sucks. Hand another win to the national banks, because God knows, they can’t have a lowly state attorney general messing with High Finance.
Mike Toreno
Check out your library’s online databases. My library has Rolling Stone on Proquest, accessible from home, from 1992 to June 25, 2009. Is the Taibbi article in the July 2 issue? If so, you will have to wait a few more days to get it online.
kay
@Mike G:
I’m glad they aren’t investing. Screw that. They weren’t protected properly, and it’s a flat-out lie that it’s a level playing field.
I can’t both have a job and make money to “invest” and monitor Wall Street, from the command center at my kitchen table. It’s ludicrous to pretend I can. The SEC can’t. I’m supposed to police these people ? How?
David
OT:
This is from the same guy that’s been trying to sell Obama’s real birth certificate (as opposed to the fake one from Hawaii):
“I’ve written a dissertation about the physical birth (which took place on August 4th, 1961) of United States President Barack Hussein Obama II. ”
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=160345324422&viewitem=&sspagename
bidding is up to $13k
JK
Congratulations Bernie.
Can’t wait to see David Letterman tonight. Of all the late night hosts, he’s the one who has gone off on Madoff the most.
syl
@kay:
I think a lot of smaller banks and credit unions are still like that. Where I went to college there was a local bank that only had three branches. Maybe they had some money from the school (I doubt it because the school had its own corporate partner bank) but, primarily, they were a retail bank that wanted retail customers. My meager savings account actually meant something to them so they treated me well.
@Mike G:
I hope so, I’d hate to think that this guy was hired and retained on merit. I interacted with about 5 or 6 SEC lawyers primarily during that case. One was excellent, one was ok, and the rest were terrible. I think part of the problem is that gov jobs pay less than private practice (particularly for more experienced attorneys) so they end up with a weird mixture of people. Some find the particular subject matter interesting or want to serve the public interest (good), and some think it’s the fastest way to become a super-cool, super-important lawyer who can tell people how do to stuff because you’re the boss that’s why (bad). For whatever reason, that last group seems to eat up a disproportionate number of promotions.
Brachiator
@syl:
When it comes to your money, you trust no one but yourself. And even there, you gotta be careful. Madoff got away with a lot of what he did, because he depended on people trusting him.
“Bernie? He’d never screw me. He’s been earning me steady profits for years.”
Yeah, right.
kay
@syl:
And, I was wrong about the SCOTUS case. Cuomo is saying it’s a win, so what the hell do I know. I read it as a loss. Also, the troika of four conservatives dissented, so maybe it is a win.
Original Lee
BushCo has done more to undermine J.Q. Citizen’s trust in almost everybody else than almost any other White House I can think of. Nixon at least limited his damage to politicians and the national party structure, AFAICTFH. Post-Bush 43, I think I can count the number of institutions I have a certain amount of trust in on the fingers of one hand. I can no longer believe that my self-interest aligns well with even watchdog institutions.
I’m glad Madoff is going away for a very long time. He had no remorse for what he did, just for getting caught. I hope the officials at the SEC who blocked investigating him get toasted over an open fire for a while, too. Other good news (belated): EPA declared a public health emergency for Libby, Mont., which was promised the declaration in 2001 but which was blocked by the White House.
ironranger
Oh dear, how will Ruth Madoff survive on 2.5 million & why isn’t she going to be sitting in jail with her husband?
Middle class folks who are delaying retiring or ruling out retirement entirely because they’ve lost 30% to 40% of their retirement plans would probably like to see people held responsible for that too.
Meanwhile, Morning Joe had Rudy Giuliani on to talk about Madoff’s sentence & is also asked if Gov Sanford should resign. Our “news” media goes that extra mile to be embarrassing and useless.
Jennifer
Here’s what amazes me: in this country awash with guns and unhinged lunatics, to date no one has stalked and killed a Bernie Madoff or Ken Lay or John Thain.
Why not?
The very remote fear of payng a fine of less than 1% of what they stole or spending a few months in a country club prison clearly is no deterrent. I tend to believe assassination would be, however.
Note that I’m not advocating that anyone start shooting those guys, but also note that I’m not indicating that I would cry if they did. Whatever happened to this country that these guys are still breathing? Is there seriously no one whose entire life savings were stolen by these cobags so their wives could buy a few more $40,000 designer purses who has the balls to take them out?
Paul L.
I am surprised at the venom directed at Madoff. Afterall he did to help narrow the gap between rich and poor.
I would guess it is because Arianna Huffington and other progressives lost some of their trust funds because of him.
Gaia speed progressive hero.
The power is yours.
The Moar You Know
@Jennifer: The kind of people who have “life savings” and “work hard” are not the kind of people who load up the ol’ Remington with 30-06 match grade and take out those who have destroyed their lives.
Unfortunately.
@Paul L.: Go back to sleep, you freak.
kay
@ironranger:
Madoff protected his family, and that’s partly why he received the maximum sentence. He actually didn’t cooperate. He and one other person are going to prison. That’s it.
hidflect
I live with someone who works in GS (very low level). They almost scream at me when I try to raise the subjects as related in Rolling Stone. Threatened to kick me out. Their world view will not be challenged. GS is an honorable company and I am just jealous of their success!!
syl
@Brachiator:
Yeah I guess. I think its possible to find someone trustworthy but there’s always going to be a certain amount of gut-feeling style guessing they have to do. I certainly wouldn’t take anyone one person’s word as financial gospel.
ironranger
Of course he was protecting her but it annoys me when she is just as guilty, imo.
Joshua Norton
Only 150 years? So what’s to stop him from doing it all over again once he gets out?
James Hare
Whatever — Madoff is a scapegoat for the rest of the crooks on Wall St. All of those exotic securities and derivatives contracts were just more complicated frauds than Madoff’s.
Unfortunately I have lost faith that our President will do a damn thing about it. He’s owned by banksters too.
Neo
The SEC failure was based on the same reason that had people believing the global “consensus” that there were stockpiles of WMD in Iraq … a failure of imagination.
The SEC was (is) complacent to look at all those reports and forms that are sent their way each month, quarter and year. One of the Madoff whistleblowers, who was ignored over and over again, complained that the lawyers at the SEC were happy to look at the reports (which Madoff prepared so very well, while frauds) and saw nothing out of the ordinary, and had no ability to see when they were being taken for a ride. They lawyers understood the forms, but not the markets.
Makes you wonder if any SEC employees lost money to Madoff.
asiangrrlMN
Eh. Color me unimpressed. Anything past, say, twenty years (for Madoff) is useless. Make him work at a homeless shelter or at a McDonalds with no bennies (along with his wife). Have him see what the world is really like for those not named Madoff and friends. This is bullshit.
Martha Stewart was targeted because she was a woman, I believe, but I also think she deserved to do time.
Wall Street will continue to do what it does. I can’t even muster up the outrage because really, what difference does it make? Slap on the wrist and away they go. As long as our governmental system is slated towards only people with money or who can make a lot of money from donations from the fat cats on Wall Street and in Big Pharma, Big Agra, etc., nothing substantial will change.
P.S. Alan Rickman MUST play Madoff in the bioflick. I order it so.
Xenos
I can’t believe anyone does business with Goldman Sachs since the oil bubble reporting came out. If Forbes Magazine is publishing that you are a bunch of crooks then you would think it would be hard to ignore at this point.
Does the Taibbi article go into the Semgroup accusations?
Steeplejack
@asiangrrlMN:
Admit it: you want Rickman to play everybody in everything.
Steeplejack
Man, I just finished reading the PDF of Taibbi’s piece, and it is killer. I’m talking Ida Tarbell/Upton Sinclair raking of the muck. Tomorrow I am going to buy the current Rolling Stone in tribute, regardless of which undertalented flavor-of-the-month pop-rock asshole is on the cover.
Brachiator
@asiangrrlMN:
Madoff committed financial homicide. Some of his victims are not only personally wiped out, but their parents and children are wiped out as well. Imagine the magnitude of the swindle that not only would wipe out your life savings, but also prevent you from being able to take care of your now impoverished parents.
Madoff should die in prison. There is almost no restitution he could make, ever.
Huh? WTF? Stewart had previously been a securities dealer and knew the rules about insider trading. In what universe should these rules not apply to her because of her gender?
And somehow people forget Samuel D. Waksal, founder of ImKlone and the other side of the scandal: On June 10, 2003, Waksal was sentenced to seven years and three months in prison and ordered to pay more than $4 million in fines and back taxes, all the maximum punishments allowable under law. Waksal is not eligible for parole. He is currently serving time in the Federal Correctional Institution, Otisville in New York state as inmate number 53803-054, But he was released from a half way house Feb 9th, 2009.
I do believe that his punishment was a bit more harsh than that suffered by Stewart. Was he targeted because he was a man?
And then there is Peter E. Bacanovic, Martha Stewart’s stockbroker and fellow defendant in the ImClone stock scandal. On July 16, 2004, he was sentenced to five months imprisonment and five months of home incarceration, followed by two years’ probation, a sentence similar to Stewart’s. And yet, because he is not a celebrity, most people don’t even know that he was involved in the case, and have this false picture of Martha all out there by herself, sacrificed by mean old grinches who know nothing about proper place settings.
I am with you 100% on this one.
Glocksman
@Jennifer:
Because this lunatic doesn’t have ironclad proof of a direct link between Madoff and the 35% I lost in my 401(k) and doesn’t want to execute a potentially innocent person. :)
Seriously though, Madoff himself mostly scammed the truly wealthy who won’t literally take him out and shoot him in the ear.
Though if he screwed up and ripped off a Russian Mafia boss or a Colombian cocaine cowboy, I had nothing to do with his being found in pieces in his cell.