Madoff Schemes Eluded Business Reforms

Image: eyevine New York Times

Bernard Madoff, founder of Bernard L. Madoff Investment Securities and former Nasdaq chairman was charge on December 11, 2008 with massive fraud. He is alleged to have mastered the largest scam in the history of the world in which he bilked his own investors out of a possible $50 billion in a massive Ponzi scheme. An ongoing investigation is uncovering the startling details.[1. Source: Time.com.]

Whistle blower, Harry Markopoulos, testified at a hearing by a House committee about the huge Ponzi scheme to say that he had been sounding warnings about Madoff repeatedly for nine years. Markopoulos said that it took him fewer than eight hours to mathematically prove that Madoff was a fraud. He wrote a lengthy memo for the SEC in 2000, he met with the SEC enforcement staff, and he continued to sound the alarm for years, to no avail. It was only after Madoff ran out of money that he was caught.[2. Source: TradingMarkets.com.]

Startling also is the absence of scrutiny and reforms that would have overseen such a huge investment company to keep it in check. However, an Absence of Reform happens when none of the American Cycles are in a period of reform, as is the case now. A period of reform comes when a Cycle crosses into the Low half and begins a 3rd Quarter of Review and Reform. None of the American Cycles are that position now as all Cycles are Trirhythmic High. This has made recent times a heyday for business during which activity expands and reforms are wane. In the case of Madoff, this combination of trends led to a bust.