Another One Bites The Dust

Kennyboy66

tomterm8 wrote: »

I feel much more sympathetic to these clients, if things are as implied.

In Madoff's case, I just had no sympathy. People were investing in a deal that looked too good to be true, the returns were too high to be true, it should have been obvious he was a crook (and, yeah, the regulator should have known, but so should most of the investors...)

In this case, it appears that the company was raiding customer accounts, and lying to them. Could happen to anyone who uses a stock broker. Very little an individual can do except rely on regulators / auditors to detect it - and they screwed up, if the story is right.

Fair point, but doesn't everything look too good to be true in hindsight.

tomterm8

Kennyboy66 wrote: »

Fair point, but doesn't everything look too good to be true in hindsight.

Er... nope.

Good investment is basically balancing risk vs reward. You can lose your shirt off a good investment, because the risks turn into reality.

But in Madoffs case, he was selling a very high return on investment with low risks, and that is the definition of "too good to be true,".

Generali

Kennyboy66 wrote: »

While Madoffs victims were hardly the man on the clapham omnibus, it will be a struggle to garner much symapthy for MF's victims.

Contagion ? well who knows but the ongoing collapse of the Euro has a higher probability and higher impact by a factor of 100

One bunch of extremely rich, alledgedly* clever crooks steal from another.

Who cares ?

Don't assume that all the account holders at MF Global were rich by US standards. For example:

Ed Levy, 37, who works at an information-technology company in Denver, opened an account with a commodities-trading adviser about a month ago. The adviser built up his funds about 8% to 10%, to $21,700, money now inaccessible to him.

If 33,000 investors who have lost money have lost $1,200,000,000 between them then that's about $36,000. Not chump change but hardly great riches either. That's the average so for each person with $200,000 in their account there will be hundreds with $10,000 in theirs.

Included in the $1,200,000,000 are 5,000 securities customers (which is why you'll also see the number 38,000 investors who have lost out). The 5,000 are insured and will get all their money back up to $500,000 under the Securities Act.