Monday, September 7, 2009

Insights on Madoff's interactions with the SEC

The SEC released the 22 page summary of the 450 page report detailing its interactions with Bernie Madoff. The NY Times article on this summary described how Bernie was able to persuade investigators when they were getting close to catching him. We know that all successful fraud perpetrators are great at building confidence and are often referred to as a "con man" as a result. The report noted Bernie's abilities in this area and also showed that he could be very domineering when he needed to be. Here are a few excerpts from the NY Times:

One investigator described Mr. Madoff as “a wonderful storyteller” and “a captivating speaker” after the 2005 encounter in which Mr. Madoff, a former Nasdaq chairman, boasted of his ties to people high up in the S.E.C. and said he was on the short list to be the next agency chairman — the post that went to Mr. Cox.

But Mr. Madoff turned angry — “veins were popping out of his neck,” an investigator said — when asked to produce certain documents, and he tried to dictate what paperwork he would yield. When the investigators reported back to their superior in the S.E.C.’s Northeast regional office, “they received no support and were actively discouraged from forcing the issue.”

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