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Bernie Madoff, king of Ponzi schemes, dies in prison aged 82

14 April 2021 7:05 PM
Tags:
Fraud
Steinhoff
The Money Show
Ponzi scheme
Bruce Whitfield
Investment Scam
Pyramid scheme
US
markus jooste
Michael Treherne
2008 global financial crisis
ponzi
Bernie Madoff

What lessons can South Africans learn from the Madoff disaster? Bruce Whitfield interviews Vestact's Michael Treherne.

He's probably the world's most infamous Ponzi schemer.

Now Bernie Madoff has died at the age of 82.

His end came in the medical centre of a prison in North Carolina, where he was serving a 150-year jail term.

Madoff had been tripped up during the global financial crisis and was sentenced in 2009.

The high-flying scamster was denied early release - he'd petitioned the courts on the basis of terminal kidney failure.

Bruce Whitfield revisits the Madoff saga with Michael Treherne, portfolio manager at Vestact Asset Management.

$65 billion is R1 trillion - The man managed to have a Ponzi scheme of R1 trillion!

Michael Treherne, Portfolio manager - Vestact Asset Management

It shows you how well he did it.

Michael Treherne, Portfolio manager - Vestact Asset Management

Investigators think he started his Ponzi scheme in the 70s... Madoff said it was legitimate in the 70s, and the great crash in the late 80s and early 90s is what caused him to start the Ponzi scheme. Then the great recession in 2008 is what caused it to go plop! again.

Michael Treherne, Portfolio manager - Vestact Asset Management

New money comes in, pays out people who are exiting and eventually when you've got less money coming in than going out, that's when it all comes crashing down.

Bruce Whitfield, The Money Show host

The fact that Madoff was perceived as a reputable investor in New York high society worked in his favour.

Are there parallels for the Madoff case in South Africa (think Steinhoff's Markus Jooste)?

A man with a good reputation and very stable returns - why wouldn't you want to trust him?

Michael Treherne, Portfolio manager - Vestact Asset Management

Madoff clearly felt that he was smarter than everybody else and smarter than the market.

Bruce Whitfield, The Money Show host

I suppose that when you get to his level - R1 trillion under management - you start believing the hype and that you're god-like.

Michael Treherne, Portfolio manager - Vestact Asset Management

Such an important lesson here is about investing in personality... People stopped thinking and they started investing blindly. And when there was a scarcity factor it just made more people want to put their money in because there was this desperate FOMO around Bernie Madoff.

Bruce Whitfield, The Money Show host

Listen to the discussion about lessons for South Africans and possible parallels with SA's disgraced Markus Jooste:




14 April 2021 7:05 PM
Tags:
Fraud
Steinhoff
The Money Show
Ponzi scheme
Bruce Whitfield
Investment Scam
Pyramid scheme
US
markus jooste
Michael Treherne
2008 global financial crisis
ponzi
Bernie Madoff

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