GotMyOrangeCrush t1_jaeqo5d wrote on February 28, 2023 at 10:17 PM

Reply to comment by [deleted] in How exactly do Hedge funds work ? by [deleted]

By all appearances, when you invested with Madoff you were putting your money with a trusted investment firm. Madoff was a trusted and respected leader in that space.

And for those people who invested and received good returns with Madoff, there actually wasn't a problem.

The issue with a Ponzi scheme is at some point it's going to crash, and that's what happened around 2008 and it left Madoff with a $7 billion hole in his balance sheet (and life in prison).

I attended a speech by Harry Markopolos. This man figured out that Madoff was a fraud well before anyone else, but no one would believe him.

https://en.m.wikipedia.org/wiki/Harry_Markopolos#:~:text=In%202010%2C%20Markopolos's%20book%20on,the%20larger%20companies%20it%20supervised.

[deleted] OP t1_jaeqy3y wrote on February 28, 2023 at 10:19 PM

[deleted]

GotMyOrangeCrush t1_jaet69r wrote on February 28, 2023 at 10:35 PM

Yes. There were likely investors who had no issues with it as long as they got out before it all crashed.

In fact, part of the resistance to exposing Madoff was that investors were making returns. (Even though those returns were money stolen from other investors).