Posts Tagged ‘Bernie Madoff’

Bernie Goes From The Penthouse To The Big House

Friday, September 25th, 2009

When something seems too good to be true, it’s probably because it is. Consider this a cautionary tale…

  • Bernard Madoff was sent to jail on March 12th after pleading guilty to one of the biggest fraud scandals in history. Many believe the international attention of Madoff’s fall has worsened our “national crisis of confidence and distrust of the financial system.”
  • His crime: a global, multi-billion dollar Ponzi scheme.
  • The jailing came 3 months after Madoff’s infamous confession of his crime to his sons. Madoff insisted two sons worked for a part of his business that was separate from the Ponzi scheme. Yet the court says they were “one.”

Facts & Figures

  • Madoff faces a maximum 150-year sentence, but will most likely get as little as 20.
  • Many of Madoff’s investors lost all of their money, and one even committed suicide.
  • If he’s sent to a general population prison, his new reality would look like this: a TV in a common area, a ping-pong table, library visits, a rooftop basketball court every other day, and a khaki prison uniform.

Best Quote

“I realized that my arrest and this day would inevitably come.” – Bernard Madoff

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On Boards, More Members Provide More Security

Tuesday, August 18th, 2009

This fascinating study shows that charity boards with fewer members lost an overwhelmingly larger amount of money to Bernie Madoff, and the accompanying article provides advice on what makes a better board.

  • A study carried out by the National Committee for Responsive Philanthropy demonstrated that the majority of charities that lost at least 30% of their assets to Bernie Madoff’s Ponzi scheme had four or fewer board members.
  • The reason behind the study’s results seems to be that among small, homogeneous boards, if one member decides an investment is a good idea, the rest of the board is not large or varied enough to argue.
  • In order to avoid becoming victims of the next Bernie Madoff, charities ought to enlarge and diversify their boards.

Facts & Figures

  • The study used a list of 150 charities linked to Bernie Madoff.
  • Of the 105 organizations that lost at least 30% of their assets, 38 had one or two trustees listed on their tax forms, and 46 had three or four.
  • Only 16 of the 105 organizations had five or more members on their boards.

Best Quote

“We think part of what’s going on here is small, homogeneous boards where someone knew someone who trusted Bernie Madoff and that was enough. But it’s not enough to allow Uncle George or Grandpa to say Bernie’s a good guy and make an investment.” – Aaron Dorfman, Executive Director of the National Committee for Responsive Philanthropy