What is the point of more regulations of hedge funds? Honestly? If we have Madoff fully regulated by the SEC who could and probably did walk in there to check them out and they still did NOTHING.
I happen to know a lot of families who have lost everything. They totally trusted Madoff. There was no reason not to because his returns were great for some many years. Many people invested in other funds of funds and may not even know that they have lost everything invested in that fund.
How is it the SEC is only now bringing an action when apparently there were articles pointing out red flags as long ago as 2001? See here and here.
What is the point of putting ourselves in the hands of government to protect us? They don't do it. Government and more, bigger government is not the answer. The legislators have no real clue what the unintended consequences are of what they do. For example, they put into effect a "marked to market" rule in order to avoid Enron from ever happening again. This was supremely stupid. Why? Because there were already laws in effect which dealt with fraud and regulation which could have and should have been applied to Enron to begin with.
Now we are stuck with a system which sometimes penalizes companies for very good investment which may be held for the long term. How do you explain it? What is the value of your home? Well for the last 10 years there was an average value BUT if you had to "mark it to market" for tomorrow and no one is buying, you will have to value it at zero.
Maybe I am wrong on this--but I don't think so.
This is close to home since I know a lot of people affected. I would hazard a guess that this will ripple through the entire Jewish Long Island population who has (had?!) a lot of money. Due to the fact that he knew many of his investors as contemporaries, many were just retired. They are totally hammered on this.
I wonder about his sons and daughter who were in the business. They had to know....
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The sons actually turned him in. The article I read says they didn't have exposure to the fund management side of the business and they were shocked when their dad called them in.
We were wondering last night about all the taxes paid on the previous "gains." Doesn't the government have to give them back to make people whole now? Shouldn't all the programs funded with this dirty money be defunded?
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