Recoup The Recoupable

I have a hard time understanding the Madoff Affair. How did a man who ran a very successful, respected and profitable business get himself into such a mess? How could his brother and his two sons - who are reputed to be very bright - not have known what was going on and that Bernard was a psychopath? How could so many august financial institutions not have figured out what the representatives of Societe Generale realized during the course of a two-day visit at Madoff's offices, after which they put his fund on their internal black list? Why did the authorities not follow up on the suggestion, made years ago, that Madoff was running a Ponzi scheme? How could individuals and - even worse - non-for-profits and large funds of funds have place a very large portion of their assets -in some cases all their assets - with one money manager? Why did large international banks place billions of dollars entrusted to them by clients in a fund with which they didn't place any of their own assets? I fear that, once more, the main answer is unchecked greed. Retirees, trustees and fund managers thought they had found a safe way to invest their money conservatively and with an excellent and steady return without bothering to do any significant do diligence. Banks and middlemen made out like bandits by pocketing huge commissions to channel funds for management by Madoff. Rich people have become, overnight, candidates for soup kitchens and many charities have been forced to cease operations; however, the Madoff family, probably, has tens of millions stashed away in tax-heaven accounts and all those who collected commissions are happily living off their huge profits. Much of what has been lost is gone forever but it is still possible to recoup enough to recover, say, 10 or 15 cents on the dollar for all those who were duped. While a receiver is trying to sell Madoff's brokerage and trading businesses, authorities should repossess all payments made during the last five years to early investors in his fund using funds contributed by later investors, as well as all bonuses paid to management and employees just before the shit hit the fan. Furthermore, a concerted effort should be made to find and recuperate any hidden Madoff family funds and to realize as much as possible from the sale of Madoff's real estate assets. Finally, all those who collected commissions for channeling funds to Madoff - middlemen, international banks and funds of funds - should be forced to return this money to the appointed receiver; we are talking, probably, of billions of dollars. We have seen once more the nefarious effects of deregulation and non-enforcement of regulations that still exist. Anyone who manages other people's money should be checked annually by the SEC to ensure that it is done honestly, banks and funds of funds should be liable for not doing sufficient do diligence before investing funds that have been entrusted to them and the commissions paid for channeling money to a given manager or fund should be limited. Investment is always a risky business but fraud should not be part of the equation.