Why you should care about Bernard Madoff.

Bernard Madoff was recently arrested for securities fraud after being turned in by his sons. Madoff's fraud is valued around $50 billion. The list of those directly affected by Mr Madoff is extensive, but the majority of Americans don't seem to care because it didn't affect them. The truth is that we are all affected, albeit indirectly, by Mr Madoff's scheme.

Madoff ran the largest Ponzi scheme in the history of the United States and he did it for years. He was described by some of his closest friends as the most honest man in America. He donated millions to various charities. I don't know why he did it and I'm not sure I care, but the fact that he did do it and got away with it for so many years is unacceptable to me.

First of all how did he fly under the radar for so many years? Why didn't the SEC step in and act on the tips that we are now hearing had been coming in for years? We live in a Country where the top government officials make a fraction of what our society deems them worth. The President pulls less than half a million per year and when he leaves office he can make that much in one speaking engagement. The top SEC officials make millions in salary and stock options when they leave their posts for the private sector. Those who leave are protected by those left behind and Mr Madoff seems to have been protected from investigations from time to time.

The Ponzi Scheme in itself is a danger to society. There are many variations, but boiled down to basics the scheme is a form of investment fraud where the original investors are paid with the money from newer investors. The scheme generally continues until the investors try to withdraw their investments and find that there is no investment to withdraw from. Often this coincides with a down turn of the market like we have had recently.

What Bernard Madoff did to me was shake my trust in our financial system. Madoff's scam scares me more than anything that has happened in the past year. We live in a time where wealth is tracked by computers. Million dollar purchases are done through the internet. All of my accounts are held at financial institutions. I don't know the CEO's of these banks. I haven't met with their accounting firms. I have an account showing that I own shares of Nike, but I've never seen any stock certificates. I base my decisions on the information I read in the balance sheets. I trust that the figures are correct. I trust that Nike really is selling that many Lebron Shoes.

Millions of Americans trust others to handle their investments. How do they make the decision on who to choose. To my knowledge Bernard Madoff has always received glowing reviews by his family and friends, some of whom have lost large sums of money as a reslut of Mr Madoff's actions.

Before I was born my grandfather made a stock purchase from a woman in his home town. Shortly thereafter the stock price soared and he stood to make a large profit. He returned to the woman and nullified his purchase. He did not even want to appear to have made an insider deal. He would not have that woman think bad of him. I fear that many today would call what my grandfather did an act of stupidity rather than see it for what it was. My grandfather would not sell his integrity for any amount of money.


My greatest fear is that we as a society no longer operate under principles of morality. Bernard Madoff sold his integrity and in so doing finally gave me something to be afraid of this year.