ÿþ<html> <head> <meta http-equiv="content-type" content="text/html;charset=iso-8859-1"> <title>OnlineColumnist®.com: Duke's Damage Control</title> <meta name="generator" content="Adobe GoLive 4"> <style type="text/css"> .style2 { font-size: x-large; } .style3 { text-align: left; } .style4 { font-size: x-large; font-weight: bold; } </style> </head> <body bgcolor="white" vlink="black"> <center> <table cool width="624" height="2719" border="0" cellpadding="0" cellspacing="0" gridx="16" showgridx gridy="16" showgridy> <tr height="79"> <td width="116" height="118" rowspan="2" valign="top" align="left" xpos="0"><a href="aboutdiscobolos.html"><img height="110" width="62" src="images/discobolos.logo.transp.gif" border="0"></a></td> <td width="24" height="118" rowspan="2"></td> <td width="465" height="79" colspan="2" valign="top" align="left" xpos="140"><img height="75" width="450" src="images/banner.GIF"></td> <td width="18" height="118" rowspan="2"></td> <td width="1" height="79"><spacer type="block" width="1" height="79"></td> </tr> <tr height="39"> <td width="182" height="39"></td> <td width="283" height="39" valign="top" align="left" xpos="322"><a href="aboutdiscobolos.html"><img height="14" width="267" src="images/divisionofNEW.GIF" border="0"></a></td> <td width="1" height="39"><spacer type="block" width="1" height="39"></td> </tr> <tr height="26"> <td width="624" height="26" colspan="6" valign="top" align="left" xpos="0"> <table border="0" width="100%" bgcolor="black" cellspacing="0"> <tr> <td> <table border="0" width="100%" bgcolor="#99ffcc" cellspacing="0" cellpadding="4"> <tr> <td align="center"> <div align="left"> <a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> HOME</strong></font></a><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> &#8226; <a href="articlesindex.html">ARTICLES</a> &#8226; <a href="books.html">BOOKS</a> &#8226; <a href="teflon.html"> THE </a><a href="teflon.html">TEFLON</a><a href="teflon.html"> REPORT</a> &#8226; <a href="mailto:letters@onlinecolumnist.com"> REACTIONS</a> &#8226; <a href="aboutdiscobolos.html">ABOUT DISCOBOLOS</a></strong></font></div> </td> </tr> </table> </td> </tr> </table> </td> </tr> <tr height="1"> <td width="116" height="2574" rowspan="2" valign="top" align="left" xpos="0"><img height="172" width="111" src="images/johninframe3.jpg"></td> <td width="489" height="1" colspan="3"></td> <td width="18" height="2574" rowspan="2"></td> <td width="1" height="1"><spacer type="block" width="1" height="1"></td> </tr> <tr height="2573"> <td width="489" height="2573" colspan="3" align="left" xpos="116" content valign="top" csheight="2573"> <font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="5"><b> <br /> Madoff Gets Life</b></font><p><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b> by John M. Curtis<br> (310) 204-8700</b><br> </font></p> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><i>Copyright July 1, 2009<br> All Rights Reserved.</i></font></p> <p><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<span class="style2">&nbsp;&nbsp;</span></span><span class="style4">S</span>entenced in the Lower Manhattan courtroom of U.S. District Court Judge Denny Chin, former Nasdaq chairman Bernard Madoff got 150 years for his record-breaking $65 billion Wall St. Ponzi scheme.<span style="mso-spacerun: yes">&nbsp; </span>Facing his accusers, Madoff could only summons a sheepish,  I m sorry . . . not enough for the thousands of investors bilked out of their life s savings.<span style="mso-spacerun: yes">&nbsp; </span>Choking back rage, nine victims could barely contain themselves, pleading with Judge Chin to give the 71-year-old con artist the maximum sentence.<span style="mso-spacerun: yes">&nbsp; </span>More than revenge, they should have focused on getting back their money, something Madoff knows something about.<span style="mso-spacerun: yes">&nbsp; </span>Madoff s Wizard-of-Oz-like empire crashed and burned during the latest stock market meltdown, losing seven trillion dollars in wealth for American investors.<span style="mso-spacerun: yes">&nbsp; </span>Madoff s scandal was especially egregious since, unlike other failed investments, he operated an outright scam.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Ordinary investors, including some of the nation s biggest funds, lost trillions in the last stock market crash, 90% more than Madoff.<span style="mso-spacerun: yes">&nbsp; </span>Failed investment strategies at least offer investors the promise of better days when the market recovers.<span style="mso-spacerun: yes">&nbsp; </span>Madoff s scheme offered nothing other that the remote possibility that Madoff s personal fortune could reimburse duped investors.<span style="mso-spacerun: yes">&nbsp; </span>Madoff earned a sterling reputation delivering investors a consistent 10%-12% returns while other Wall St. investors made peanuts or lost their shirts.<span style="mso-spacerun: yes">&nbsp; </span>Celebrities like Hall-of-Fame left-handed pitcher Sandy Koufax, Academy Award winning director Steven Spielberg, movie mogul Jeffrey Katzenberg and some of the nation s most respected charities invested with Madoff losing endowments and sending institutions into insolvency.<span style="mso-spacerun: yes">&nbsp; </span>All sought higher-than-expected-market returns, ignoring the possible risks.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Before Madoff s sentencing last Friday, Chin ordered him to liquidate $170 billion in assets, including all his family s cash and real estate holdings, leaving his wife Ruth with a measly $2.5 million.<span style="mso-spacerun: yes">&nbsp; </span>No one knows why the 71-year-old Madoff confessed to his sons and was arrested Dec. 12, 2008, rather than flee and seek asylum. It s unclear whether or not Madoff has enough assets to repay the $65 billion lost by investors.<span style="mso-spacerun: yes">&nbsp; </span>  Nothing I say can correct the things I ve done, Madoff told a packed courtroom sitting at a defense table some 20 feet in front of nine victims and their families. He should have reassured victims that his family will liquidate every asset to reimburse any and all victims.<span style="mso-spacerun: yes">&nbsp; </span>Clearing his throat, Madoff read a prepared statement absolving his family of any responsibility.<span style="mso-spacerun: yes">&nbsp; </span>Only recently, his wife argued to the court that millions in assets were not part of her husband s fraud.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><span style="mso-spacerun: yes">&nbsp;&nbsp;&nbsp; </span>Madoff s statement, read in open court, indicated that none of his family knew that his investment firm was a giant hoax.<span style="mso-spacerun: yes">&nbsp; </span> He told the court he  left a legacy of shame . . to my family and my grandchildren, sharing on a personal note,  my wife cries herself to sleep every night, eliciting little sympathy from the courtroom.<span style="mso-spacerun: yes">&nbsp; </span>Madoff s attorney argued for leniency, urging Judge Chin to ignore prosecutors to limit his sentence to 12 years.<span style="mso-spacerun: yes">&nbsp; </span> The unified tone of the victim statements suggests as desire for a type of mob vengeance, said Madoff s lawyer Ira Sorkin, urging Judge Chin to reduce the sentence.<span style="mso-spacerun: yes">&nbsp; </span>Sorkin s strategy backfired, prompting Chin to heed victims and mete out the maximum sentence.<span style="mso-spacerun: yes">&nbsp; </span>Most victims wanted the maximum punishment because of the egregious nature to Madoff s crimes.<span style="mso-spacerun: yes">&nbsp; </span>Madoff lived too high on the hog to elicit victims or the court s sympathy </p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Madoff s fraud strikes at the heart of Wall St. where most investors lost their nest eggs, life s savings and retirements in legitimate businesses.<span style="mso-spacerun: yes">&nbsp; </span>Investors in Bear Stearns, Lehman Bros., Fannie Mae, Freddie Mac, AIG, etc. watched investments go up in smoke, much the same as Madoff s, despite having stock certificates.<span style="mso-spacerun: yes">&nbsp; </span>Madoff had a 20-year track record paying investors back, making good on his promise to offer investors competitive yields.<span style="mso-spacerun: yes">&nbsp; </span> When some of the nation s biggest and most conservative banks invested depositors cash in risky  derivatives, the Banks officers weren t charged with fraud and misrepresentation.<span style="mso-spacerun: yes">&nbsp; </span> When those companies declared bankruptcy, shareholders were wiped out.<span style="mso-spacerun: yes">&nbsp; </span>There s a fine line between  smoke-and-mirrors and legitimate businesses practices in the securities industry.<span style="mso-spacerun: yes">&nbsp; </span>Pointing the finger only a Madooff ignores Wall St. s indiscretions.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Madoff s scandal should remind all investors that Wall St. carries heavy risks in even the most legitimate businesses.<span style="mso-spacerun: yes">&nbsp; </span>It s inconceivable that Madoff s family was duped, professing ignorance of the fraudulent practices that only recently came to light.<span style="mso-spacerun: yes">&nbsp; </span> I do not agree with that the victims are succumbing to the temptation of mob vengeance, said Judge Chin, acknowledging that they put their faith in the judicial system.<span style="mso-spacerun: yes">&nbsp; </span>Prosecutors continue to pursue Madoff s accountant 49-year-old David Friehling, who they believe conspired with Madoff to defraud the public.<span style="mso-spacerun: yes">&nbsp; </span>Prosecutors should also pursue the Securities and Exchange Commission for the lax oversight that allowed Madoff to operate under the radar screen.<span style="mso-spacerun: yes">&nbsp; </span> With all the warnings, the SEC bears responsibility for accepting audits from a boiler room accountant.<span style="mso-spacerun: yes">&nbsp; </span>Had they done their job, Madoff would have been exposed long ago.</p> <p class="style3"> &nbsp;<b>John M. Curtis</b> writes politically neutral commentary analyzing spin in national and global news.&nbsp; He's editor of OnlineColumnist.com and author of <a href="books.html">Dodging The Bullet </a>and <a href="books.htnl">Operation Charisma</a>.</p> </td> <td width="1" height="2573"><spacer type="block" width="1" height="2573"></td> </tr> <tr height="1" cntrlrow> <td width="116" height="1"><spacer type="block" width="116" height="1"></td> <td width="24" height="1"><spacer type="block" width="24" height="1"></td> <td width="182" height="1"><spacer type="block" width="182" height="1"></td> <td width="283" height="1"><spacer type="block" width="283" height="1"></td> <td width="18" height="1"><spacer type="block" width="18" height="1"></td> <td width="1" height="1"></td> </tr> </table> <table border="0" cellpadding="0" cellspacing="2" width="597"> <tr> <td><font size="1" face="Arial,Geneva,Helvetica"> <hr noshade size="1"> </font><a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> Homene.net" target="_blank"><img height="30" width="138" src="images/cmelogoANIM.gif" border="0" align="absmiddle"></a></font></p> </div> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">&copy;1999-2002 <a href="aboutdiscobolos.html">Discobolos Consulting Services, Inc.</a><br> (310) 204-8300<br> All Rights Reserved. </font></td> </tr> </table> </center> </body> </html>